Walmart reports solid eCommerce sales for Q2: ‘it’s gaining share from Amazon’

on Aug 17, 2023
  • Walmart Inc reports strong results for its second financial quarter.
  • Forrester Research's retail analyst discussed its earnings print on CNBC.
  • Walmart stock is now up more than 10% versus the start of 2023.

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Walmart Inc (NYSE: WMT) had a strong second quarter as it continued to gain share in groceries resulting in strong food sales.

Walmart’s guidance for the future

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Shares of the retail behemoth opened slightly up today on guidance that was roughly in line with expectations as well.

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Walmart now sees its per-share earnings coming in between $6.36 to $6.46 in fiscal 2024 on 4.0% to 4.5% sales growth. In comparison, analysts were at $6.30 a share and 4.4%, respectively. On CNBC’s “Squawk Box”, retail analyst Sucharita Kodali of Forrester Research said today:

There’s still some resilience in consumer spent which suggests the economy is pretty strong. But they should probably be a little cautiously optimistic for the rest of the year.

The multinational’s forecast for current-quarter sales came in well ahead of Street estimates on Thursday. Walmart shares are now up more than 10% versus the start of this year.

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Walmart Q2 financial highlights

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  • Earned $7.89 billion versus the year-ago $5.15 billion
  • Per-share earnings also climbed from $1.88 to $2.92
  • Adjusted EPS printed at $1.84 as per the press release
  • Revenue went up 6.0% year-on-year to $161.63 billion
  • Consensus was $1.71 a share on $160.22 billion revenue

Walmart noted a 6.4% annualised growth in its U.S. same-store sales this quarter – also ahead of estimates. According to Forrester’s expert:

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Numbers were pretty strong. There was almost no metric that seemed soft. They’re so weighted in grocery and that’s what consumers are spending on … they’re buying and they’re buying at Walmart.

Advertising and eCommerce excelled in Q2

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Walmart saw a whopping 35% annualised growth in its advertising business in the second quarter. eCommerce sales also jumped 24%. Kodali added:

Average growth rate in eCommerce is in the low teens. Anybody growing higher than that is gaining share. Walmart is [gaining share online from Target] and even gaining share I’d argue from Amazon.

All in all, the big box retailer improved its gross margin by 50 basis points in Q2.

Other notable figures in the earnings report include a 13% increase in international sales. But Sam’s Club U.S. sales declined 0.3% in the recently concluded quarter to $21.8 billion. Last month, Walmart revealed plans of spending another $1.4 billion on India’s Flipkart as Invezz reported here.

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