Aug. 15 (UPI) – Walmart on Thursday reported stronger-than-expected second-quarter growth of 4.8 percent and operating profit growth of 8.5 percent. The company said it does not expect a recession or fear a deterioration in consumer health.
Walmart CEO Doug McMillon said in a statement: “Our team delivered another strong quarter. They work hard every day to help our customers and members save time and money. Every part of our business is growing – sales in stores and clubs are increasing, e-commerce is growing as we add pickup, and delivery is growing even faster as our speed increases.”
He added that Walmart’s newer businesses, such as its e-commerce site Walmart Marketplace, as well as advertising and memberships, are also contributing to the company’s improved economic performance.
The retailer’s e-commerce activity grew 21% worldwide.
Walmart CFO John David Rainey told CNBC that strong results in the first half of 2024 had increased forecast performance estimates.
“In this environment, it’s responsible or wise to be a little cautious about the outlook, but we’re not predicting a recession,” Rainey said. “We’re seeing our members and customers continue to be picky, discerning, price-conscious and focusing on things like essentials rather than luxury items, but importantly, we’re not seeing any further deterioration in consumer health.”
Rainey said Walmart continues to put pressure on its suppliers to lower their prices.
The company’s net income fell to $4.5 billion in the second quarter compared to $7.89 billion in the same quarter last year.
Regarding expectations for the third quarter, Walmart said in a statement that the company is raising its sales and profit growth forecast for fiscal year 2025. Sales are expected to grow by 3.25 to 4.25 percent for the third quarter of this year, while the company expects operating profit to increase by 3.0 to 4.5 percent.
Walmart reported $8.8 billion in cash or cash equivalents and total debt of $47.0 billion.
Walmart shares rose 6.5 percent on Thursday and gained 20 percent after the release of first-quarter results.
Walmart primarily appeals to budget-conscious shoppers looking for low prices, but has also seen recent growth among people earning more than $100,000 a year.
Michael Baker, an analyst at DA Davidson, said: “The only places anyone is shopping right now are Amazon, Walmart and Costco. Walmart is very concerned about value. Value has become more important. Structurally, they are well positioned.”
