Walmart managed to come out ahead of analysts’ predictions across the board when it reported Q2 earnings earlier today (Aug. 15), with slight beats in earnings, revenue and same-store sales.
“Customers are responding to the improvements we’re making, the productivity loop is working and we’re gaining market share,” CEO Doug McMillon said in a statement shortly after the results went public.
Net income increased to $3.61 billion, or $1.26 per share, beating analysts’ forecasts of $1.22 and a marked improvement over the net loss of 29 cents a share ($861 million) Walmart reported last year at this time. Revenue also came in ahead of the $130.11 forecast before the earnings release, with total revenue up 1.8 percent to $130.38 from $128.03 billion at this time in 2018. Net U.S. sales were up 2.9 percent to $85.20 billion from $82.82 billion a year earlier.
Same-store sales also came in ahead narrowly ahead of analysts’ predictions, increasing by 2.8 percent instead of the 2.1 percent forecast. Transactions also reportedly picked up narrowly, 0.6 percent during the quarter as opposed to 2.7 percent at this time last year. Basket size increased as well, with the average ticket up 2.2 percent over a year ago.
eCommerce continued to show strong growth, with sales up 37 percent in Q2, level with its Q1 growth and putting the company well in line with the 35 percent total eCommerce growth forecast for 2019 (a dip from the 40 percent growth logged in 2018).
Amazon's Prime Day shopping event was apparently a boost for Walmart's total sales picture, as it offered four consecutive days of deals to match its main retail competitor’s offerings. Gordon Haskett Analyst Chuck Grom estimated that during the event, Walmart saw about 14 percent of the visits that Amazon received during the sales event, according to CNBC's reporting.
Apart from the Prime Day pop, Walmart credited its expansion of grocery delivery and online order/in-store pickup throughout the U.S. To date, according to the retailer, 2,700 of its stores offer grocery pickup, while 1,100 offer same-day delivery. Walmart also confirmed that its one-day shopping options now reach 75 percent of the U.S. population.
For fiscal 2020, Walmart's predictions were more or less in line with their prior guidance.
Walmart's stock initially popped up 5 percent in the aftermath of the announcement, but as the stock market as a whole trended down, Walmart's stock slipped as well, trending down in afternoon trading.