Walmart Thursday reported better than excpected second quarter sales and operating income growth, with its Marketplace e-commerce site jumping 21% globally. File Photo by James Atoa/UPI |
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Aug. 15 (UPI) -- Walmart on Thursday reported stronger than expected second-quarter growth of 4.8% and 8.5% operating-income growth. The company said it's not projecting a recession and isn't seeing a fraying of 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. Each part of our business is growing -- store and club sales are up, e-commerce is compounding as we layer on pickup and even faster growth in delivery as our speed improves."
He added that newer Walmart business areas such as e-commerce site Walmart Marketplace, as well as advertising and membership also are contributing to improved company economic performance.
The retailer's e-commerce operations jumped 21% globally.
Walmart CFO John David Rainey told CNBC strong results in the fist half of 2024 have raised projected performance estimates.
"In this environment, it's responsible or prudent to be a little bit guarded with the outlook, but we're not projecting a recession," Rainey said. "We see, among our members and customers, that they remain choiceful, discerning, value-seeking, focusing on things like essentials rather than discretionary items, but importantly, we don't see any additional fraying of consumer health."
Rainey said Walmart continues to push its suppliers to cut prices.
The company's net income dropped to $4.5 billion in the second quarter compared with $7.89 billion in the same quarter a year ago.
Regarding third quarter expectations, Walmart said in a statement that it is raising its sales and profit growth outlook for fiscal year 2025, with third quarter sales this year expected to grow 3.25% to 4.25% while the company expects operating income to grow 3.0% to 4.5%.
Walmart reported $8.8 billion in cash or cash equivalents with a total debt of $47.0 billion.
Walmart stock rose 6.5% Thursday and has gained 20% following its first quarter results report.
Walmart appeals primarily to value-oriented shoppers looking for low prices, but has also posted recent growth with people making more than $100,000 a year.
DA Davidson analyst Michael Baker said, "The only place anyone is shopping right now is Amazon, Walmart and Costco. Walmart does a great job focusing on value. Value has become more important. Structurally, they're well positioned."