E-commerce gross merchandise volume grew 67%
Online transactions increased 60% in the quarter on the strength of fresh digital initiatives and a growing assortment of products on Walmart.com, the company said in reporting second-quarter earnings.
Walmart posted net income of $2.8 billion in its second quarter on revenue of $123.3 billion. In the same quarter of 2016, the company reported net income $3.7 billion on revenue of $120.8 billion.
“Thanks to the team for delivering another solid quarter. Our customers are responding to the improvements in stores and online, and our results reflect this. Traffic increases at store level and the e-commerce growth rate are key highlights,” Doug McMillon, Walmart’s president and chief executive officer, said in a statement. “We are moving faster and becoming more creative as we strive to make every day easier for busy families.”
Walmart U.S., the company’s largest division, posted sales of $78.7 million in the quarter, up 3.3%. Operating income for the segment increased to $4.6 billion from $4.5 billion a year earlier.
Sam’s Club reported sales of $14.8 billion, an increase of 2.3% from the second quarter of 2016. Operating income in the division was $404 million, down 14.4%.
Walmart International posted sales of $28.3 billion in the quarter, down from $28.6 billion a year ago. When adjusted for currency differences, the revenue rose 2.5% to $29.3 billion, Walmart said. Operating income in the division was $1.5 billion, down 7.8%. Adjusted for currency differences, the decline was 2%.
Operating income for the three divisions totaled $5.9 billion, down 3.2% from the $6.1 billion a year earlier.
Walmart said online shoppers in the United States “continued to respond well to new initiatives and an expanded assortment of more than 67 million SKUs.”
Food categories saw their strongest quarterly comparable-sales increase in five years, Walmart said.
The retailer’s profit margins fell slightly in the quarter due to more aggressive promotions. The company has been investing to keep its prices competitive, and McMillon said that while those moves are yielding results, more needs to be done.
“We need to scale our e-commerce business further and see some additional strengths in our store comps to deliver the results we know we’re capable of,” McMillon said.