Walmart‘s second-quarter earnings exceeded Wall Street’s expectations on Tuesday as the retail giant gained ground in its grocery business and had a strong start in back-to-school sales.
Shares are down less than 1% in premarket trading.
The discounter also sharpened its forecast for the year, saying it now anticipates that earnings per share will be between $6.20 to $6.35. It said it expects Walmart U.S. same-store sales to increase by 5% to 6%, excluding fuel.
Chief Financial Officer Brett Biggs said in an interview with CNBC that customers flocked to stores for items like luggage, party supplies and apparel as they were “coming out of hibernation.” Plus, he said, families have been buying backpacks and items for the classroom.
CEO Doug McMillon said in a news release the company grabbed more market share in grocery, one of its core businesses. He said it has also made progress in new areas, adding thousands of online sellers to its third-party marketplace and nearly doubling advertising sales in Walmart U.S. in the quarter versus a year ago.
Here’s what the company reported for the fiscal second quarter ended July 31, according to Refinitiv consensus estimates:
- Earnings per share: $1.78 adjusted vs. $1.57 expected
- Revenue: $141.05 billion vs. $137.17 billion expected
Walmart reported net income fell to $4.28 billion, or $1.52 per share, from $6.48 billion, or $2.27 per share, a year earlier. Excluding items, the company earned $1.78 per share. Analysts were expecting Walmart would earn $1.57 per share, according to Refinitiv.
Total revenue rose by 2.4% to $141.05 billion from $137.74 billion a year earlier, exceeding Wall Street’s expectations of $137.17 billion.
Walmart’s same-store sales in the U.S. grew by 5.2%, higher than the increase of 3.3% expected by analysts, according to a StreetAccount survey. Over the past two years, the retailer said its same-store sales have increased by 14.5%. During the same period, it said its U.S. e-commerce sales have doubled—with digital growing 6% year-over-year.
Same-store sales for Walmart subsidiary, Sam’s Club, increased by 7.7% excluding fuel — more than the 3.7% growth expected by analysts.
Customers also shopped differently in the quarter than a year ago, as they visited Walmart’s store and website more. Transactions rose by 6.1% in Walmart U.S. and average ticket fell by nearly 1%.
This story is developing and will be updated.