Walmart grows online and in stores
Walmart's revenue grew 8.4% in Q2, with the discount giant beating analysts' estimates both on sales and profit.
Why it matters: While the big box retailer's results were driven in part by higher prices and margins remain under pressure, its performance is outstripping that of other retailers.
By the numbers: Walmart specifically noted that e-commerce sales grew 12% and comparable sales for its flagship Walmart banner in the U.S. grew 6.5%.
- Net income clocked in at about $5.1 billion, a 20% increase year over year.
- Global advertising revenue was up 30% in Q2 as well.
- Walmart shares were up 6% in Tuesday morning trading.
Between the lines: Walmart continues to steal pages from Amazon's playbook by offering new services outside its core retail operations, with its deal with Paramount+ the latest example.
- But the behemoth still leverages its vast network of stores and warehouses, and its ability to offer lower prices to steal market share.
- And while Walmart's e-commerce sales are growing, Amazon's declined 4% in the last quarter.
Yes, and: Amazon has had a difficult time replicating Walmart's success with physical stores, facing particularly stiff competition in grocery.
What they're saying: “The thing that impresses me about Walmart is that they were not content to just stay Walmart,” says Howard Meitiner, a managing director at restructuring advisory firm Carl Marks Advisors.
- “All the strategic partnerships they are forming are impressive,” Meitiner says, citing the Paramount+ deal.
- One of the advantages of scale, especially if there is a solid management team in place, is it allows the company to make investments to hedge against change, he adds.
👀 What we're watching: Meitiner predicts there will be an increasing number of collaborations and partnerships across the retail landscape in the coming months, mirroring that of Walmart.
- Though late to the game, Macy's announced a collaboration with Toys R Us, for example.