Pandemic helps boost Walmart’s online delivery sales
YORK – Americans turned to Walmart’s online business as well as its stores for supplies and home goods as the virus surged in new regions, resulting in soaring sales for the fiscal second quarter.
Walmart’s online sales nearly doubled in the fiscal second quarter, helped by an expansion of its online delivery services. Sales at U.S. locations open at least a year jumped 9.3%, the company reported Tuesday.
The nation’s largest retailer topped almost all expectations by wide margins.
Consumers had already begun to rely on Walmart and other essential retailers like Target and Amazon as lifelines for necessities during the start of the pandemic, sending Walmart’s online sales up 74% for the fiscal first quarter. That trend accelerated to 97% in the second quarter and broadened the gap between traditional retailers, many of them anchor stores at malls, and big box operators like Walmart and Target.
With unemployment in the U.S. at high levels, Walmart’s ability to deliver low-priced food, clothing and electronics widened its structural advantages.
Walmart’s earnings followed a standout fiscal second-quarter performance from the nation’s largest home improvement chain, Home Depot, helped by a frenzied pace for do-it-yourself home renovations. The home improvement chain reported Tuesday a 23.4% increase in sales at stores open at least a year globally. That’s almost twice the 12.2% increase that industry analysts
Walmart’s earnings followed a standout performance from Home Depot, helped by a frenzied pace for DIY home renovations. The two companies are among the few bright spots in an industry mostly battered by the pandemic.
had projected.
The two companies are among the few bright spots in an industry mostly battered by the financial fallout of the pandemic.
Department store chain Kohl’s reported an adjusted loss that was smaller than expected, but revenue fell 23% in the fiscal second quarter. The results came as Kohl’s worked to reopen its 1,100 stores after temporarily closing them all during the start of the pandemic.
Net income for Walmart Inc. reached $6.48 billion in the quarter, or $2.27 per share. Earnings, adjusted for one-time gains and costs, were $1.56 per share, easily outpacing Wall Street projections of $1.22, according to a survey by Zacks Investment Research.
The world’s largest retailer posted revenue of $137.74 billion, also exceeding expectations.
The surging sales took place as the U.S. rolled out massive assistance plans for the millions who had lost jobs or who were furloughed.
The $600-a-week federal unemployNEW ment check that had been sent to roughly 28 million laid-off workers is gone. And a $1,200 stimulus check that was sent to many Americans in April and May appears to be a thing of the past. Negotiations in Congress on a new economic relief package have collapsed and there is no sign of an agreement on more aid.
That had been a concern for analysts trying to predict how that will influence where Americans shop. Already, Walmart is seeing the expiration of benefits boosting its business.
“As the benefits from stimulus wane towards the end of the quarter, we saw comp sales settle into a more normal range,” CEO Doug McMillon said.
Also, Walmart and other retailers are facing soaring costs related to the pandemic that include mostly extra pay for workers on the front lines. Walmart said that costs related to COVID-19 hit $1.5 billion during the fiscal second quarter, up from nearly $900 million the previous quarter.