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Walmart says shopper spending fell when the financial controls expired

Shoppers wear masks while shopping at a Walmart store in Bradford, Pennsylvania on July 20, 2020.

Brendan McDermid | Reuters

Walmart's fiscal second quarter sales were boosted by this spring's stimulus checks, but they weakened in July as shoppers spent that money.

Now the retail giant is waiting to see if the government will put more money into customers' pockets and give the company another boost.

Walmart reported a strong second quarter on Tuesday, fueled by a 97% increase in US e-commerce sales. Doug McMillon, CEO of Walmart, said the company is benefiting from Americans cooking more at home, looking for ways to entertain themselves during the pandemic, and spending money on their homes and yards. Part of these dollars came from government incentives.

For the rest of the year, however, the company did not provide a financial outlook. In an interview with CNBC, Brett Biggs, Walmart's chief financial officer, pointed to government incentives as a factor creating uncertainty during the pandemic.

"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," Biggs said. "I think it would certainly be helpful to consumers."

In the second quarter, sales in the same store in the US increased 9.3%. That fell back in July when shoppers had issued their stimulus checks but were still above 4% – more than many quarters before the pandemic started.

McMillon said he would like to see the government support small businesses, and that would determine whether customers have cash in their pockets.

"This economy and this country are so driven by small and medium-sized businesses that we want something to happen there that supports these people," he said.

– CNBC's Bertha Coombs and Amanda Lasky contributed to this story.

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