Walmart U.S. Grew Comp Sales 6.5% in Q2, Including Mid-Teens in Food, and eCommerce Up 12%
Bentonville, AK — Walmart delivered strong top-line growth globally, partially driven by inflation. Total revenue was $152.9 billion, up 8.4%, or 9.1% in constant currency2.
Walmart U.S. comp sales1 grew 6.5% and 11.7% on a two- year stack. eCommerce growth was 12% and 18% on a two-year stack. Continued to gain market share in grocery.
Sam’s Club comp sales1 increased 9.5%, and 17.2% on a two-year stack. Membership income increased 8.9% with member count at an all-time high.
Walmart International net sales were $24.4 billion, an increase of $1.3 billion, or 5.7%, negatively affected by
$1.0 billion from currency fluctuations. Double-digit comps in three largest markets of Mexico, Canada, and China.
Global advertising business3 grew nearly 30%, led by Walmart Connect in the U.S. and Flipkart advertising.
Consolidated gross profit rate declined 132 basis points, primarily due to markdowns and mix of sales in the U.S., and an inflation-related LIFO charge at Sam’s Club.
Consolidated operating expenses as a percentage of net sales decreased 45 basis points, primarily due to strong sales growth partially offset by wage investments.
Consolidated operating income was $6.9 billion, a decrease of 6.8%, positively affected by $173 million from an insurance settlement for Walmart Chile.
GAAP and Adjusted EPS2 include a $0.05 impact from the Walmart Chile insurance settlement discussed above, as well as a $0.05 impact from a dividend related to the Company’s equity investment in JD.com.
Comp sales for the 13-week period ended July 29, 2022 compared to the 13-week period ended July 30, 2021, and excludes fuel. See Supplemental Financial Information for additional information.
2 See additional information at the end of this release regarding non-GAAP financial measures.
3 Our global advertising business is recorded either in net sales or as a reduction to cost of sales, depending on the nature of the advertising arrangement.
Key results
(Amounts in billions, except as noted. Dollar and percentage changes may not recalculate due to rounding.)
| Q2 FY23 | Q2 FY22 | Change | ||||||
| Revenue | $152.9 | $141.0 | $11.8 | 8.4% | ||||
| Revenue (constant currency)1 | $153.9 | $141.0 | $12.8 | 9.1% | ||||
| Operating income | $6.9 | $7.4 | -$0.5 | -6.8% | ||||
| Operating income (constant currency)1 | $6.9 | $7.4 | -$0.4 | -6.0% | ||||
| Free Cash Flow1 | YTD FY23 | $ Change | Returns to Shareholders | Q2 FY23 | % Change |
Operating cash flow $9.2 -$3.2 Dividends $1.5 -0.3% Capital expenditures $7.5 $2.5 Share repurchases2 $3.3 39.6% Free cash flow1 $1.7 -$5.7 Total $4.9 24.0%
Third quarter and Fiscal Year 2023 guidance
The following guidance reflects the company’s expectations for Q3 and fiscal year 2023 and is provided on a non-GAAP basis as the company cannot predict certain elements which are included in reported GAAP results, including the changes in fair value of the company’s equity and other investments. Growth rates reflect an adjusted basis for prior year results. The company’s guidance assumes a generally stable consumer in the U.S., continued pressure from inflation and mix of products and formats globally.
Third quarter
- Consolidated net sales growth of about 5%, negatively affected by approximately $1.3 billion from currency
- Walmart S. comp sales, excluding fuel, of about 3.0%.
- Consolidated operating income decline of 0% to 10.0%.
- Adjusted earnings per share decline of 0% to 11.0%.
Fiscal Year 2023
The company updates its guidance for the fiscal year to reflect second-quarter performance and maintains its outlook for the back-half of the year.
- Consolidated net sales growth is expected to be about 5%. Excluding divestitures3, consolidated net sales growth is expected to be about 5.5%. Based on current exchange rates, the company expects a headwind of about $2.1 billion in the second half of the year.
- The company maintains its expectations for Walmart S. comp sales growth, excluding fuel, of about 3% in the second half of the year. For the full year, the company expects Walmart U.S. comp sales growth, excluding fuel, of about 4%.
- Consolidated adjusted operating income is expected to decline 0% to 11.0%, which improved from the company’s prior guidance of a decline of 11.0% to 13.0% and reflects better performance in the second quarter. Excluding divestitures3, consolidated adjusted operating income is expected to decline 8.0% to 10.0%.
- Adjusted earnings per share are expected to decline 0% to 11.0%. Excluding divestitures3, adjusted earnings per share is expected to decline 8.0% to 10.0%.
- See additional information at the end of this release regarding non-GAAP financial measures.
2 $4.9 billion remaining of $20 billion authorization approved in February 2021. The company repurchased approximately 26 million shares in Q2 fiscal 2023.
3 We completed the sale of our operations in the U.K. and Japan in the first quarter of fiscal 2022.
Segment results
(Amounts in billions, except as noted. Dollar and percentage changes may not recalculate due to rounding.)
| U.S. | Q2 FY23 | Q2 FY22 | Change |
|
| Q2 FY23 | Q2 FY22 | Change | ||||||
| Net sales | $24.4 | $23.0 | $1.3 | 5.7% | ||||
| Net sales (constant currency)1 | $25.3 | $23.0 | $2.3 | 9.9% | ||||
| Operating income | $1.0 | $0.9 | $0.2 | 21.1% | ||||
| Operating income (constant currency)1 | $1.1 | $0.9 | $0.2 | 28.3% | ||||
| Q2 FY23 | Q2 FY22 | Change |
|
Walmart Inc.
Condensed Consolidated Statements of Income (Unaudited)
Three Months Ended Six Months Ended July 31, July 31,
|
(Amounts in millions, except per share data) |
2022 |
2021 |
Percent Change |
2022 |
2021 |
Percent Change |
| Revenues: | ||||||
| Net sales | $151,381 | $139,871 | 8.2 % | $291,669 | $277,030 | 5.3 % |
| Membership and other income | 1,478 | 1,177 | 25.6 % | 2,759 | 2,328 | 18.5 % |
| Total revenues | 152,859 | 141,048 | 8.4 % | 294,428 | 279,358 | 5.4 % |
| Costs and expenses: | ||||||
| Cost of sales | 115,838 | 105,183 | 10.1 % | 222,685 | 208,455 | 6.8 % |
| Operating, selling, general and administrative expenses | 30,167 | 28,511 | 5.8 % | 59,571 | 56,640 | 5.2 % |
| Operating income | 6,854 | 7,354 | (6.8)% | 12,172 | 14,263 | (14.7)% |
| Interest: | ||||||
| Debt | 395 | 437 | (9.6)% | 767 | 918 | (16.4)% |
| Finance lease obligations | 84 | 78 | 7.7 % | 167 | 163 | 2.5 % |
| Interest income | (31) | (37) | (16.2)% | (67) | (67) | — % |
| Interest, net | 448 | 478 | (6.3)% | 867 | 1,014 | (14.5)% |
| Other (gains) and losses | (238) | 953 | (125.0)% | 1,760 | 3,482 | (49.5)% |
| Income before income taxes | 6,644 | 5,923 | 12.2 % | 9,545 | 9,767 | (2.3)% |
| Provision for income taxes | 1,497 | 1,559 | (4.0)% | 2,295 | 2,592 | (11.5)% |
| Consolidated net income | 5,147 | 4,364 | 17.9 % | 7,250 | 7,175 | 1.0 % |
| Consolidated net (income) loss attributable to noncontrolling interest | 2 | (88) | (102.3)% | (47) | (169) | (72.2)% |
| Consolidated net income attributable to Walmart | $ 5,149 | $ 4,276 | 20.4 % | $ 7,203 | $ 7,006 | 2.8 % |
| Net income per common share: | ||||||
| Basic net income per common share attributable to Walmart | $ 1.88 | $ 1.53 | 22.9 % | $ 2.62 | $ 2.50 | 4.8 % |
| Diluted net income per common share attributable to Walmart | $ 1.88 | $ 1.52 | 23.7 % | $ 2.61 | $ 2.48 | 5.2 % |
| Weighted-average common shares outstanding: | ||||||||
| Basic | 2,736 | 2,799 | 2,745 | 2,807 | ||||
| Diluted | 2,745 | 2,812 | 2,755 | 2,820 | ||||
| Dividends declared per common share | $ | — | $ | — | $ | 2.24 | $ | 2.20 |
| Walmart Inc.
Condensed Consolidated Balance Sheets (Unaudited) |
||||
|
July 31, |
January 31, |
July 31, |
||
| (Amounts in millions) | 2022 | 2022 | 2021 | |
| ASSETS | ||||
| Current assets: | ||||
| Cash and cash equivalents | $ 13,923 | $ 14,760 | $ 22,831 | |
| Receivables, net | 7,522 | 8,280 | 6,103 | |
| Inventories | 59,921 | 56,511 | 47,754 | |
| Prepaid expenses and other | 2,798 | 1,519 | 1,555 | |
| Total current assets | 84,164 | 81,070 | 78,243 | |
| Property and equipment, net | 96,006 | 94,515 | 91,621 |
| Operating lease right-of-use assets | 13,872 | 13,758 | 13,868 |
| Finance lease right-of-use assets, net | 4,514 | 4,351 | 4,109 |
| Goodwill | 28,664 | 29,014 | 29,159 |
| Other long-term assets | 19,979 | 22,152 | 21,552 |
| Total assets | $ 247,199 | $ 244,860 | $ 238,552 |
| LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST, AND EQUITY | |||
| Current liabilities: | |||
| Short-term borrowings | $ 10,634 | $ 410 | $ 671 |
| Accounts payable | 54,191 | 55,261 | 49,601 |
| Dividends payable | 3,049 | — | 3,109 |
| Accrued liabilities | 23,843 | 26,060 | 23,915 |
| Accrued income taxes | 868 | 851 | 267 |
| Long-term debt due within one year | 5,316 | 2,803 | 1,617 |
| Operating lease obligations due within one year | 1,464 | 1,483 | 1,441 |
| Finance lease obligations due within one year | 534 | 511 | 501 |
| Total current liabilities | 99,899 | 87,379 | 81,122 |
| Long-term debt | 29,801 | 34,864 | 39,581 |
| Long-term operating lease obligations | 13,140 | 13,009 | 13,116 |
| Long-term finance lease obligations | 4,420 | 4,243 | 3,952 |
| Deferred income taxes and other | 14,092 | 13,474 | 13,654 |
| Commitments and contingencies | |||
| Redeemable noncontrolling interest | 260 | — | — |
| Equity: | |||
| Common stock | 272 | 276 | 278 |
| Capital in excess of par value | 4,672 | 4,839 | 3,655 |
| Retained earnings | 82,519 | 86,904 | 84,572 |
| Accumulated other comprehensive loss | (9,894) | (8,766) | (7,976) |
| Total Walmart shareholders’ equity | 77,569 | 83,253 | 80,529 |
| Nonredeemable noncontrolling interest | 8,018 | 8,638 | 6,598 |
| Total equity | 85,587 | 91,891 | 87,127 |
| Total liabilities, redeemable noncontrolling interest, and equity | $ 247,199 | $ 244,860 | $ 238,552 |
Walmart Inc.
Condensed Consolidated Statements of Cash Flows (Unaudited)
|
Six Months Ended July 31,
Walmart Inc.
Supplemental Financial Information (Unaudited)
|
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Net sales and operating income
(dollars in millions) Walmart U.S. Walmart International Sam’s Club
Corporate and support
Consolidated
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U.S. comparable sales results
Walmart U.S. Sam’s Club
Total U.S.
Comparable sales is a metric that indicates the performance of our existing stores and clubs and it is important to review in conjunction with the company’s financial results reported in accordance with GAAP. Comparable sales excluding fuel is also an important, separate metric that indicates the performance of our existing stores and clubs without considering fuel, which is volatile and unpredictable. Other companies in our industry may calculate comparable sales differently, limiting the comparability of the metric.
Walmart Inc.
Reconciliations of and Other Information Regarding Non-GAAP Financial Measures (Unaudited)
The following information provides reconciliations of certain non-GAAP financial measures presented in the press release to which this reconciliation is attached to the most directly comparable financial measures calculated and presented in accordance with generally accepted accounting principles (GAAP). The company has provided the non-GAAP financial information presented in the press release, which is not calculated or presented in accordance with GAAP, as information supplemental and in addition to the financial measures presented in the press release that are calculated and presented in accordance with GAAP. Such non-GAAP financial measures should not be considered superior to, as a substitute for or alternative to, and should be considered in conjunction with, the GAAP financial measures presented in the press release. The non-GAAP financial measures in the press release may differ from similar measures used by other companies.
|
t sales:
As reported $ 24,350 5.7% $ 151,381 8.2 % $ 48,113 -4.4% $ 291,669 5.3 %
Currency exchange rate fluctuations 956 N/A 956 N/A 1,332 N/A 1,332 N/A Constant currency net sales $ 25,306 9.9% $ 152,337 8.9 % $ 49,445 -1.8% $ 293,001 5.8 %
Operating income:
As reported $ 1,043 21.1% $ 6,854 -6.8 % $ 1,815 -11.7% $ 12,172 -14.7 %
| Currency exchange rate fluctuations | 62 | N/A | 62 | N/A | 83 | N/A | 83 | N/A |
| Constant currency operating income | $ 1,105 | 28.3% $ 6,916 | -6.0 % $ 1,898 | -7.6% $ 12,255 | -14.1 % | |||
1
Six Months Ended July 31,
| (Dollars in millions) | 2022 | 2021 |
| Net cash provided by operating activities | $ 9,240 | $ 12,423 |
| Payments for property and equipment (capital expenditures) | (7,492) | (5,019) |
| Free cash flow | $ 1,748 | $ 7,404 |
| Net cash (used in) provided by investing activities1 | $ (8,584) | $ 2,402 |
| Net cash used in financing activities | (1,400) | (11,559) |
1 “Net cash (used in) provided by investing activities” includes payments for property and equipment, which is also included in our computation of free cash flow.
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