Walmart has managed to exceed analyst forecasts and achieve very good results in the second quarter of the year. The net profit were higher than expected, reaching 5,149 million of dollars and this represents an improvement of 20.4% compared to the results of the same period of the previous year. This has allowed it to have a 6% growth in the stock market.
The Walmart Chairman and CEO Doug McMillonhe stated in the release be happy with the support they are getting during this period of customer inflation. «The steps we have taken to improve inventory levels in the US, coupled with a heavier sales mix in groceries, put pressure on the second quarter profit margin and our outlook for the year. Throughout the quarter, we have made good progress in improving our supply chain costs, work that is ongoing. We continue to develop our strategy to expand our digital businesses, including the continued strength of our international markets» shared McMillon.
Walmart’s revenue this quarter has been 152,859 million of dollars, increasing 8.4%. Two of the areas that have reported the most growth to the company are online stores in the United States (they grew by 6.5% and 11.7% in the last two years) and e-commerce in the country (they grew by 12% and 18% in the last two years)
At the international level the results have not been bad at all. They have reached 24.4 billion dollars, an increase of 5.7% (increase of 1.3 billion dollars). However, they have been negatively affected losing up to 1 billion due to currency fluctuations.
Walmart GoLocal reaches one million shipments in the first year
Walmart’s last-mile delivery service, Walmart GoLocal, has surpassed one million deliveries in its first year. The company offered an update on its results for the second quarter where, in addition, it pointed out that it is very close to reaching 5,000 establishments that have this service.
GoLocal went live in August 2021 so other merchants could take advantage of Walmart’s supply chain. Retailers can use the service to make all types of deliveries, including scheduled or same-day deliveries (Express Delivery). The only difference is that these deliveries are managed by external workers to the company who are hired to manage these shipments and their express shipments.
The company expects this line of business to grow in the coming years and could be an additional source of income.
“We continue to sign up customers on a large scale and are making progress on the largest unlock, which is small and medium-sized businesses“, He said Walmart CEO Doug McMillon, to investors, talking about the growth of GoLocal. “Our technology and experience will help many of these businesses grow while contributing to our operating margins over time.”.
Forecasts for the third quarter and 2023
Along with the results, they have shared guidance for the third quarter and fiscal year 2023. The company’s forecasts are based on a generally stable consumer base in the US, the continued pressure of inflation and the combination of products and formats worldwide.
In the third trimester it is expected:
- Consolidated net sales growth of around 5%, negatively affected by some 1,300 million dollars derived from currency fluctuations.
- Walmart US Composite Sales, excluding fuel, of about 3.0% Decrease in consolidated operating income of 8.0% to 10.0%.
- Adjusted earnings per share decreased between 9 and 11%.
For fiscal year 2023 it is expected:
- Consolidated net sales growth is expected to be around 4.5%.
- Excluding divestitures, consolidated net sales growth is expected to be around 5.5%.
- The company maintains its expectations for Walmart’s US composite sales growth, excluding fuel, of about 3% in the second half of the year. For the full year, the company expects Walmart US sales growth, excluding fuel, of about 4%.
- It is expected that consolidated adjusted operating income decrease between 9.0% and 11.0%which improves the company’s previous forecast of a decline from 11.0% to 13.0% and reflects better performance in the second quarter.
- Adjusted earnings per share is expected to decline between 9.0% and 11.0%. Excluding divestitures, adjusted earnings per share is expected to decline between 8.0% and 10.0%.