Walmart Releases Second Quarter Results with 2025 Outlook

August 15, 2024  by Karen Parrish in Business Strategy, Industry   

Walmart U.S. comp sales up 4.2%2. Looking ahead, the Company issues guidance for Q3 and raises its outlook for FY25. For Q3, net sales are expected to grow 3.25% to 4.25% and operating income to grow 3.0% to 4.5% in constant currency (“cc”) .

For FY25, net sales are expected to grow 3.75% to 4.75% and adjusted operating income to grow 6.5% to 8.0% cc.

“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, eCommerce is compounding as we layer on pickup and even faster growth in delivery as our speed improves. Our newer businesses like marketplace, advertising, and membership, are also contributing, diversifying our profits and reinforcing the resilience of our business model,” reported Doug McMillon, Walmart president and CEO.

Walmart Second Quarter Highlights

• Consolidated revenue of $169.3 billion, up 4.8%, or 5.0% (cc)
• Consolidated gross margin rate up 43 bps, led by Walmart U.S. and Walmart International
• Consolidated operating income up $0.6 billion, or 8.5%; adjusted operating income up 7.2%1 , due to higher gross margins and growth in membership income; also benefited from reduced eCommerce losses
• ROA at 6.4%, ROI at  15.1%1 , up 230 bps
• Global eCommerce sales grew 21%, led by store fulfilled pickup & delivery and marketplace
• Global advertising business grew 26%, including 30% for Walmart Connect in the U.S.
• Adjusted EPS of $0.67 excludes the effect, net of tax, from a net loss of $0.11 on equity and other investments
• Global inventory down 2.0%, including a decrease of 2.6% for Walmart U.S.; in-stock levels healthy
• Bob Moritz, retired chair of PwC, to join Walmart Inc. Board of Directors
  
  Third Quarter
• The Company’s fiscal third quarter guidance is based on the following FY24 Q3 figures: Net Sales: $159.4 billion, operating income: $6.2 billion, and adjusted EPS1: $0.51. Guidance contemplates the impact of timing of festive events in the Company’s international segment and the timing of planned expenses.
  Metric/Q3

Consolidated net sales (cc)/Increase 3.25% to 4.25%
Consolidated operating income (cc)/Increase 3.0% to 4.5%
Adjusted EPS/$0.51 to $0.52

Fiscal Year 2025
The Company’s fiscal year guidance is based on the following FY24 figures: Net sales: $642.6 billion, adjusted operating income1: $27.1 billion, and adjusted EPS1: $2.22. The Company’s full year guidance assumes a generally stable consumer and continued pressure from its mix of products and formats globally.

• /FY 2025 (updated)
  Consolidated net sales (cc)/Increase 3.75% to 4.75%
  Consolidated adj. operating income (cc)/Increase 6.5% to 8.0%
  Interest, net/Increase approximately $100M

Effective tax rate/Lower-end of original guidance (Approximately 25.0% to 26.0%)
Non-controlling interest/Unchanged from original guidance (Relatively flat)
Adjusted EPS/$2.35 to $2.43

Capital expenditures/Unchanged from original guidance (Approx.3.0% to 3.5% of net sales)

To see full report, visit Walmart Investor Relations.