Walmart Inc. threw its weight around in the second quarter, gaining share as the world’s largest retailer became even bigger.
Revenues for the quarter ended July 31 grew 4.8 percent to $169.3 billion, with comparable sales in the namesake U.S. business rising 4.2 percent on top of a 6.4 percent gain a year earlier.
Although inflation has dipped back down to more usual levels, steady price increases since the pandemic have pressured many shoppers, playing to Walmart’s low-cost sweet spot.
But as Walmart takes advantage of its positioning in the mass market, it is also evolving into a much more forward leaning business model with more digital components. That includes selling more fashion and higher price points online
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The company’s global e-commerce operation grew by 21 percent as its advertising business — a closely watched unit seen as having significant future potential — expanded by 26 percent, including 30 percent growth in Walmart Connect in the U.S.
Net profits fell by 43 percent to $4.5 billion, or 56 cents a share, from $7.9 billion, or 98 cents a year earlier, when the results benefited from a $3.9 billion gain that was slotted into the “other” category.
Adjusted profits rose 9.8 percent to 67 cents a share, 2 cents better than the 65 cents analysts forecast, according to Yahoo Finance.
Investors approved and sent shares of the company up 7.2 percent to $73.65 in premarket trading on Wall Street.
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Doug McMillon, president and chief executive officer, said in a statement: “Each part of our business is growing — store and club sales are up, e-commerce is compounding as we layer on pickup and even faster growth in delivery as our speed improves. Our newer businesses like marketplace, advertising and membership, are also contributing, diversifying our profits and reinforcing the resilience of our business model.”
The company is growing more comfortable about the year ahead.
Annual sales are now expected to increase by 3.8 percent to 4.8 percent, up from the 3 percent to 4 percent gain initially forecast. Adjusted earnings are slated to come in at $2.35 to $2.43 a share, as opposed to the $2.23 to $2.37 forecast originally. After first-quarter results, Walmart was less specific and just said it was leaning toward the higher end of its initial guidance or just above.
