Walmart sales surged past estimates as consumers continue to flock to the essential retailer for carts full of groceries, pharmacy items and at-home entertainment while the virus rages on.
US comparable sales at Walmart stores climbed 6.4 per cent when excluding fuel, beating estimates for a 3.8 per cent increase, with online demand soaring.
Despite the added costs of stocking all those goods and hiring more workers, Walmart’s gross margin added 50 basis points, or 0.5 percentage point, thanks to lower operating expenses and Covid-19-related costs.
“Customers are resilient, and they certainly continue to shop,” chief financial officer Brett Biggs said.
Economy
With the company expanding operating hours and a delayed back-to-school shopping season gaining steam, “momentum really picked up through the quarter.”
The results at the world’s largest retailer offer investors fresh insight on consumer behavior heading into the critical holiday season. Shoppers are still stocking up, eight months into the Covid-19 pandemic. Transactions fell 14 per cent during the quarter at Walmart’s US division, while the average purchase surged 24 per cent – meaning customers are consistently buying more every time they place an order.
Walmart shares climbed as much as 2.3 per cent in early trading in New York on Tuesday, headed toward a record high. The stock this year had gained 2 per cent up to Monday.
Presence
The retailer continued to expand its online presence, with e-commerce revenue growing 79 per cent after the unit nearly doubled in the second quarter. The company has invested heavily in building out its web operations, including using its fleet of stores as a distribution hub.
During the quarter, the retailer unveiled Walmart+, a subscription for $98 (€82.84) that offers discounts on goods and shipping.
“We like what we see,” Mr Biggs said, while declining to offer any specifics. “It’s going to be an important part of the puzzle. Customers are more used to memberships, and it’s something that we can do that fits really well in their own lives.” – Bloomberg
