Walmart US posts strongest Q2 comp sales growth in a decade, sales up 3.8 percent
Total revenue at Walmart Inc for the second quarter, the company said, was 128 billion dollars, an increase of 4.7 billion dollars or 3.8 percent. Excluding currency, total revenue was 127.8 billion dollars, an increase of 4.4 billion dollars or 3.6 percent. Walmart reported Q2 GAAP net loss per share of 0.29 dollars and adjusted EPS of 1.29 dollars. Operating income declined 3.7 percent to 5.7 billion dollars.
The company said, comp sales at Walmart US increased 4.5 percent, the strongest growth in more than ten years led by the performance of grocery, apparel and seasonal. Strong comp sales, Walmart added were supported by traffic and ticket growth as each exceeded 2 percent. Net sales at Walmart International were 29.5 billion dollars, an increase of 4 percent, while excluding currency, net sales were 29.2 billion dollars, an increase of 3.1 percent. The company added that comp sales were positive in the four largest markets.
Walmart updates FY19 guidance
Updating its outlook for the fiscal year 2019, Walmart said, it now expects consolidated net sales to rise about 2 percent in constant currency, impacted by sale of a majority stake in Walmart Brazil, Sam’s Club closures and tobacco actions, wind-down of first-party Brazil ecommerce, and divestiture of Suburbia. The company now expects combined impact of the above factors of decline of 180bps compared to prior outlook of 140 bps.
Comparable sales at Walmart US are expected to be up around 3 percent, at Sam's Club: around 3 percent, with negative impact from tobacco of 200 bps. The company earlier expected comparable sales at Walmart US to rise at least 2 percent and decline 1 percent at Sam's Club, with negative impact from tobacco of 400 bps. The company now expects GAAP EPS to range from 2.90 dollars to 3.05 dollars compared to prior outlook of between 4.75 to 5 dollars. Adjusted EPS is expected to range between 4.90 dollars to 5.05 dollars, excluding sale of a majority stake in Walmart Brazil, unrealized losses on JD.com investment and tax reform adjustments. Walmart earlier expected it to range between 4.75 to 5 dollars.
Commenting on Walmart’s Q2 performance, Neil Saunders, Managing Director of GlobalData Retail, said in a media statement: “As painful as they are, the erosion of profitability and margins are necessary evils. Maintaining a price leadership position as well as ensuring the company is an omnichannel leader are clear priorities that require investment. These investments are being made and they are delivering growth, which we believe in a sign that Walmart is succeeding in securing its future as one of the world's leading retailers.”