Walmart Q2 Profit Up 53%; Results Top Estimates

(RTTNews) - Retail giant Walmart Inc. (WMT) reported Thursday a net profit for the second quarter that surged 53.3 percent from last year, reflecting improved gross margins and revenue growth. The results were also driven by the rebound in international markets. Both adjusted earnings per share and revenues topped analysts' expectations. The retailer also raised its adjusted earnings guidance for the full-year 2024.

"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% globally. Food is a strength, but we're also encouraged by our results in general merchandise versus our expectations when we started the quarter," said Doug McMillon, President and CEO.

Consolidated net income attributable to Walmart for the quarter was $7.89 billion or $2.92 per share, higher than $5.15 billion or $1.88 per share in the prior-year quarter.

Excluding items, adjusted earnings for the quarter were $1.84 per share, compared to $1.77 per share last year.

On average, 28 analysts polled by Thomson Reuters expected the company to report earnings of $1.70 per share for the quarter. Analysts' estimates typically exclude special items.

Total revenue for the quarter, comprising net sales and membership and other income, grew 5.7 percent to $161.63 billion from $152.86 billion in the same quarter last year. Revenues grew 5.4 percent to $161.06 billion in constant currency. Analysts were looking for revenues of $160.27 billion for the quarter.

Net sales grew 5.9 percent to $160.28 billion, while Membership and other income increased 8.5 percent to $1.35 billion from last year. Consolidated U.S. comp sales increased 6.3 percent.

Walmart U.S. comp sales increased 6.4 percent and net sales rose 5.4 percent to $110.85 billion, led by grocery and health & wellness. Walmart U.S. eCommerce sales grew 24 percent, led by strength in pickup & delivery and advertising.

Sam's Club comp sales increased 5.5 percent, while net sales edged down 0.3 percent to $21.83 billion from last year, led by food and consumables, and healthcare. Membership income increased 7.0 percent with continued strength in Plus member growth and renewals.

Net sales at Walmart International also grew 13.3 percent to $27.60 billion, and increased 11.0 percent to $27.02 billion in constant currency, led by Walmex, China and Flipkart.

Consolidated gross margin rate improved 50 basis points on lapping elevated markdowns and supply chain costs, partially offset by ongoing mix pressure in grocery and health & wellness.

Looking ahead the third quarter, the company now expects adjusted earnings in a range of $1.45 to $1.50 per share on consolidated net sales growth of about 3 percent. Analysts expect earnings of $1.50 per share on revenues of $157.25 billion for the quarter.

For fiscal 2024, the company now projects adjusted earnings in a range of $6.36 to $6.46 per share, including an expected $0.05 impact from LIFO, on consolidated constant currency net sales growth of about 4.0 to 4.5 percent.

Previously, the company expected adjusted earnings in a range of $6.10 to $6.20 per share on consolidated constant currency net sales growth of about 3.5 percent.

The Street is looking for earnings of $6.28 per share on a revenue growth of 4.3 percent to $637.51 billion for the year.

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