Walmart’s (WMT) second quarter numbers exceeded expectations, and Mama Bear is proud. The company’s revenue increased 2% to $141b, while operating income surged 21% to $7.3b. The segment that performed best was grocery, with food sales growing $2.4b compared to a year ago. One of the main drivers has been the return of in-person shopping, with US transactions rising 6.1%.
In the midst of Covid-19 lockdowns, Walmart faced competition from smaller grocery shops and new ecommerce platforms as people changed their habits to counter the unprecedented situation. The second quarter results, however, show that Walmart has been regaining market share as life gets back to normal (guess old habits die hard). This is evident in the portion of sales that is e-commerce — which rose 6%, down from 97% 12 months ago. That being said, online orders contributed only 0.2% to Walmart’s US comparable sales gains this quarter.
Why it matters
Walmart needed a solid quarter as Amazon (AMZN) stripped away its hard-earned title as the “world biggest retailer outside China.” If Walmart wishes to keep moving forward, it will need to focus its efforts on Amazon’s home turf — e-commerce.
