Walmart’s Q2 2018 Results – Comments

I found various notable items in Walmart’s Q2 2018 management call transcript (pdf) dated August 17, 2017.  (as well, there is Walmart’s press release of the Q2 results and related presentation materials)

I view Walmart’s results and comments as particularly noteworthy given their retail prominence and focus on low prices.  I have previously commented on their quarterly management call comments; these previous posts are found under the “paycheck to paycheck” tag.

Here are various excerpts that I find most notable:

comments from Doug McMillon, President and CEO, page 4, wrt Walmart U.S.: 

We had a strong quarter with comp-sales growth of 1.8 percent and
comp-traffic growth of 1.3 percent. It’s exciting that sales growth is coming
from across the business– including stores, e-commerce and a
combination of both.

comments from Brett Biggs, EVP & CFO, page 8:

Walmart U.S. eCommerce again performed very well on the topline
as GMV grew 67 percent and sales increased 60 percent, including
acquisitions. The majority of this growth was organic through, including Online Grocery, which is growing quickly. We’re
delivering growth through an improved customer value proposition that
includes free two-day shipping on millions of items and Easy Reorder, as
well as an expanded assortment, now with more than 67 million SKUs – an
increase of more than 30 percent from the first quarter. With Easy
Reorder, we’re integrating both in-store and online purchases to provide
customers with a single spot to view and repurchase the items they buy
most frequently. Initiatives like these, along with everyday low prices, are
the reasons why customers are choosing Walmart in greater numbers. As
a reminder, we’ll begin to lap the acquisition in the third quarter.

comments from Brett Biggs, EVP & CFO, page 9, wrt Walmart U.S.: 

Gross margin rate declined 5 basis points in the quarter. Savings
from procuring merchandise benefited the margin rate but was more than
offset by the mix effects from our growing e-commerce business, as well as
continued investments in price.


The Special Note summarizes my overall thoughts about our economic situation

SPX at 2468.11 as this post is written