In sharp contrast to Target’s quarterly earnings the day before, Walmart on Thursday raised its guidance for fiscal year 2024 as U.S. comparable sales jumped 6.4% during the second quarter, driven in part by continued share growth in grocery.
For the quarter ended July 28, Walmart U.S. posted net sales of $110.9 billion, up 5.4% from the year before. Walmart’s total revenue climbed 5.7% during the period, to $161.6 billion, while gross profit rate was up 50 basis points, to 24%.
Comparable sales growth was driven by a 2.9% increase in transactions and a 3.4% increase in average ticket, and was slowed by a 230 basis-point drag from e-commerce.
Walmart’s grocery business saw “high single-digit” growth, with increases in both dollars and units sold, the Bentonville, Arkansas-based retail giant said.
Grocery inflation was down more than 400 basis points from the quarter before and down more than 700 basis points from a year ago, but food prices remain up more than 20% on a two-year stacked basis.
Sales of Walmart’s store-brand grocery products grew more than 9% during the quarter, the retailer said.
“Food is a strength, but we’re also encouraged by our results in general merchandise versus our expectations when we started the quarter,” Walmart President and CEO Doug McMillon said in a statement.
Walmart-owned warehouse retailer Sam’s Club reported a slight dip in net sales, down 0.3% from the year before to $21.8 billion compared to a year ago. Sam’s Club comparable sales, excluding fuel, increased 5.5%, though transactions have slowed from a year ago. Food and consumables propelled Sam’s Club’s sales.
Walmart’s retail media arm, Walmart Connect, report sales growth of 36% during the period.
Perhaps most impressive: e-commerce sales at Walmart U.S. jumped 24% during Q2, driven by pickup and delivery. Weekly active digital users grew more than 20% during the second quarter.
Walmart said it is working on improving digital margins, though, to make that segment a profitable one.
“We like the trends we’re seeing in e-commerce,” CFO John David Rainey told analysts.
Walmart raised its financial forecast, both for the third quarter and for fiscal year 2024. The retailer is now expecting consolidated net sales to grow approximately 3% during Q3 and 4% to 4.5% for the full year.
Walmart is the world’s largest retailer, with more than 10,500 stores and 2.1 million employees in 19 countries.