Walmart Inc. was able to throw its weight around in the second quarter, topping estimates with profit and sales gains.
The momentum has the retail giant also feeling better about the year. Walmart raised its annual guidance and expects to continue to be able to meet inflation-addled shoppers where they are with its value message.
Second-quarter net income increased 53.3 percent to $7.9 billion, or $2.92 a diluted share, from $5.1 billion, or $1.88, a year earlier. And adjusted earnings per share came in at $1.84, 13 cents better than the $1.71 analysts projected, according to FactSet.
Shares of the company were up 1 percent to $160.90 in premarket trading.
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Revenues for the three months ended July 31 rose 5.7 percent to $161.6 billion from $152.9 billion. Comparable sales increased 6.4 percent.
Competitor Target Corp. also posted big profit gains last quarter, but was tripped up on the sales line, posting a decline with weakness in discretionary categories and running into controversy with its Pride collection.
The discretionary category was a weakness for Walmart too, with apparel, home and sporting goods showing low-single comp declines at its flagship U.S. business. But Walmart U.S. was buoyed by its large grocery business, which comped up in the high-single digits.
Despite the weakness in fashion, things are looking up for Walmart.
The company raised its earnings outlook for the year to adjusted EPS of $6.36 to $6.46, ahead of the $6.10 to $6.20 forecast in May. And sales are now expected to rise by 4 percent to 4.5 percent, ahead of the roughly 3.5 percent gain seen previously.
Doug McMillon, president and chief executive officer, said: “We had another strong quarter. Around the world, our customers and members are prioritizing value and convenience. They’re shopping with us across channels — in stores, Sam’s Clubs, and they’re driving ecommerce, which was up 24 percent globally. Food is a strength, but we’re also encouraged by our results in general merchandise versus our expectations when we started the quarter. Our associates helped deliver increases in transaction counts and units sold, and profit is growing faster than sales. We’re in good shape with inventory, and we like our position for the back half of the year.”
Underneath McMillion, there was a quick game of CEO musical chairs as two executives jumped from division to division after Judith McKenna, 57, decided to retire as president and CEO of Walmart international — a business with $101 billion in revenues last year. That role is being picked up by Kathryn McLay, 49, who was head of Sam’s Club.
And Christopher Nicholas, 46, moved to become president and CEO of Sam’s Club. He was executive vice president and chief operating officer of Walmart U.S.
This story was reported by WWD and originally appeared on WWD.com.
