I found various notable items in Walmart’s Q2 2019 management call transcript (pdf) dated August 16, 2018. (as well, there is Walmart’s press release of the Q2 results (pdf) 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 Brett Biggs, EVP & CFO, page 11:
U.S. eCommerce sales grew 40 percent in the quarter. We are
improving the value proposition through enhancements to the site, app,
assortment and experience, including the list of new initiatives that Doug
mentioned. We remain focused on nailing the fundamentals. The team is
making good progress on our Customer Value Index, or CVI, and we’re
particularly pleased with the trends related to price competitiveness and
delivery promise. Given the advantage of having stores in our omnichannel
offering, we are taking a more holistic view of the customer and
accelerating investments in grocery pickup and delivery. We feel good
about the direction of the business and remain confident in our ability to
grow sales by about 40 percent for the full year.
Walmart U.S. delivered strong comp sales growth, excluding fuel, of
4.5 percent, marking the best performance in more than 10 years. Store
traffic growth of 2.2 percent and ticket growth of 2.3 percent were strong
across categories, and eCommerce contributed approximately 100 basis
points to the comp. Momentum in the business was solid throughout the
quarter, with warmer weather contributing to strong general merchandise
sales primarily in seasonal lawn & garden and apparel, which positively
impacted the Q2 comp. As you will recall, Q1 was hampered by very
unseasonably cool weather in April and Q2 was benefitted by
unseasonably warm weather in May. Year to date through Q2, Walmart
U.S comp sales, excluding fuel, were 3.3 percent.
comments from Brett Biggs, EVP & CFO, page 12, wrt Walmart U.S.:
Gross margin rate declined 34 basis points primarily related to price
investments, higher transportation expenses due to higher fuel costs and
third-party transportation rate pressure, and the increasing mix of our
growing eCommerce business.
The Special Note summarizes my overall thoughts about our economic situation
SPX at 2846.18 as this post is written