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Walmart's second quarter outcomes weigh the estimates as e-commerce gross sales develop 97%

Customers shop at a Walmart store on May 19, 2020 in Chicago, Illinois. Walmart reported a 74% increase in online sales in the US for the quarter ended April 30, and sales in the same store 10% increase over the same period that the effects of the coronavirus contributed to the increase in sales.

Scott Olson | Getty Images

Walmart recorded its biggest earnings surprise in 31 years on Tuesday, as shoppers filed their stimulus checks and online sales nearly doubled during the coronavirus pandemic.

The discounter has used its massive store base and investments in e-commerce to provide food and other goods to customers during the pandemic. Sales in the same store in the US rose 9.3% in the second quarter of fiscal year, while US ecommerce sales rose 97% as more customers sent packages to their homes and same-day delivery used the roadside pickup.

Doug McMillon, CEO of Walmart, said the company will try to build on those profits by adding a member service. He didn't say when this would start or provide details on its benefits. He said the program will accelerate deliveries for customers through roadside pickup and delivery, strengthen relationships with them, and collect valuable data.

The program, called Walmart +, is expected to compete with Amazon Prime.

Shares hit a 52-week high of $ 137.63 on Tuesday but fell less than 1% in the early afternoon.

On a call to investors Tuesday, Walmart executives said customers searched online and in stores for a variety of items, including groceries, televisions, computers, fishing rods and bikes. However, they admitted that the company was struggling to keep many of these products in stock.

Supply chain management remains challenging, according to McMillon, but performance is improving.

Here's what the company did in the second fiscal quarter ended July 31:

Earnings per share: Adjusted for $ 1.56 versus $ 1.25 expected based on Refinitiv's consensus estimates. $ 137.74 billion versus $ 135.48 billion expected in the United States according to Refinitiv estimates. Revenue in the same store: up 9.3% versus up 5.4% as expected by StreetAccount survey

In the second quarter, Walmart reported a rise in net income to $ 6.48 Billion, or $ 2.27 per share, from $ 3.61 billion or $ 1.26 per share last year.

Excluding items, the company made $ 1.56 per share, more than $ 1.25 expected by analysts surveyed by Refinitiv. The excluded items include 10 cents per share of the restructuring costs. In July, The company has cut corporate positions across its organization but has not disclosed the number of jobs that have been eliminated.

Total revenue rose 5.6% from $ 130.38 billion last year to $ 137.74 billion, beating Wall Street's expectations of $ 135.48 billion.

Walmart customers shopped less often, but bought more when they did. The average ticket increased 27% in the second quarter while transactions decreased 14%.

The retailer said it spent about $ 1.5 billion on costs related to Covid-19. During the pandemic, Walmart hired more than 400,000 hourly workers to fill online orders, clean stores, and stock shelves.

Walmart's international net sales declined 6.8% to $ 27.2 billion as the government shut down limited shopping in India, Africa and Central America during the pandemic.

Membership in Sam & # 39; s Club grew more than 60% for the quarter – the highest quarterly increase in more than five years. The warehouse club's e-commerce sales increased 39% and sales in the same store increased 13.3%.

According to Charlie O & # 39; Shea, Vice President of Moodys, the new Sam & # 39; s Club memberships are a good sign for the future.

"A key factor going forward will be how many 'new' buyers return as 'normal', and the explosion in Sam's club memberships for the quarter is in that regard a favorable sign, "said O & # 39; Shea.

Watch Washington

Brett Biggs, Walmart's chief financial officer, told CNBC that the retailer could get another boost if there was more momentum.

"Stimulus definitely hit the consumer in the second quarter. We are watching what is going on in Washington and how we move forward with a new stimulus package," he said. "I think it would certainly be helpful to consumers."

However, he said families may retreat or pretend during the back-to-school season as students prepare to study remotely or go to school just a few days a week.

Compared to previous years, the pandemic made "back to school a little more unsafe" and "a little more restless".

Walmart didn't give a financial outlook for the rest of the year. In the first quarter, she withdrew the guidelines, explaining that many factors could change her performance, including additional government incentives, consumer confidence and the length of the pandemic.

Walmart shares, valued at $ 384 billion, are up more than 14% year-to-date. While other retailers were hit by closed stores and a slowing economy during the pandemic, Walmart benefited from sales of essential items such as groceries and from strong online activity.

– CNBC's Bertha Coombs contributed to this story.

Read the full press release here.

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