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Grocery Continues to Outperform at Walmart

Company raises full-year earnings forecast as food retail, online growth fuel higher sales in Q2
Marian Zboraj, Progressive Grocer
walmart employee
Walmart U.S. e-commerce is up 24%, led by pickup and delivery.

Walmart Inc. finished its second quarter strong, with impressive revenue and operating income growth of 5.7% and 6.7%, respectively. The retail giant achieved consolidated revenue of $161.6 billion. Consolidated operating income was up $0.5 billion, while adjusted operating income rose 8.1%.

The company saw strength in its omnichannel model across segments with strong comp sales globally, including 6.4% for Walmart U.S. E-commerce at Walmart U.S. jumped 24%, led by pickup and delivery. Walmart U.S. also experienced solid revenue growth of 5.7%, with operating income growing faster, at 6.7%.

[Read more: Walmart's Omnichannel Fulfillment Network Undergoes Eco-Friendly Transformation”]

In grocery, Walmart U.S. sales of private label products rose 9% year over year. Those brands make up 20% of Walmart’s total U.S. sales.

Shoppers are buying more fresh meats, seafood and eggs as they’ve become more affordable, said Walmart CFO John David Rainey in a CNBC interview.

Walmart is leading the pace in food retail today, with a 25% market share in grocery. The retailers customer-centric approach has allowed the company to keep winning shoppers at a time when competition  especially in grocery – is at an all-time high. 

Last month, the company added to its Walmart+ membership platform Walmart+ Assist, which offers customers who receive government assistance 50% off a monthly or annual Walmart+ paid membership plan.

Further, leaning into its low-price reputation, Walmart will soon enable its customers in Canada to access digital coupons from a variety of CPG brands through a new program with Inmar Intelligence. The new program will allow coupons to be used in-store or online at all of the retailers stores in the country beginning in October, providing Walmart Canada customers with access to additional savings through CPG brands. 

Over at Sam’s Club U.S., the banner also experienced strong comp sales, led by food, consumables and health care, as well as positive unit growth overall. It gained market share in grocery and general merchandise. Its 18% growth in e-commerce was led by curbside. With membership count increasing by mid-single digits, Sam’s Club’s experienced strong 7.0% growth in membership income.

“We had another strong quarter. Around the world, our customers and members are prioritizing value and convenience. They’re shopping with us across channels — in stores [and] Sam’s Clubs, and they’re driving e-commerce, which was up 24% globally. Food is a strength, but we’re also encouraged by our results in general merchandise versus our expectations when we started the quarter. Our associates helped deliver increases in transaction counts and units sold, and profit is growing faster than sales. We’re in good shape with inventory, and we like our position for the back half of the year,” said Doug McMillon president and CEO of Walmart.

As a result of its encouraging Q2, Walmart has raised its guidance. The company now expects full fiscal-year consolidated net sales to increase by about 4% to 4.5%, and adjusted earnings per share for the year will range between $6.36 and $6.46. Its prior guidance included consolidated net sales gains of 3.5% and an adjusted-earnings-per-share range of between $6.10 and $6.20.

Meanwhile, a day before it released its Q2 earnings, Walmart revealed some major changes in leadershipJudith McKenna, president and CEO of Walmart International, will retire “following an incredible 27 years with the company.” Upon her retirement, Kath McLay will succeed her, while Chris Nicholas will take over McLay’s position as president and CEO of Sam’s Club U.S. These leadership changes will take effect on Sept. 11. 

Bentonville, Ark.-based Walmart operates more than 10,500 stores and numerous e-commerce websites around the world. Walmart U.S. is No. 1 on The PG 100, Progressive Grocer’s 2023 list of the top food and consumables retailers in North America. PG also named it one of its Retailers of the Century. Walmart’s Sam’s Club division, operating nearly 600 clubs in the United States and Puerto Rico, is No. 8 on The PG 100.

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