Walmart, Kohl’s Q2 Results Top Estimates

Retail giant Walmart Inc. (WMT) and department store chain Kohl’s Corp. (KSS) on Tuesday reported a profit for the second quarter. Walmart’s profit nearly doubled, while profit at Kohl’s plunged from last year.

Adjusted earnings per share and quarterly revenues at both Walmart’s and Kohl’s topped analysts’ expectations.

Walmart said its net sales and operating results were significantly affected by a continuation of the global health crisis. Increased demand for products across multiple categories led to strong top-line and gross margin results.

Consolidated net income attributable to Walmart for the quarter was $6.48 billion or $2.27 per share, sharply higher than $3.61 billion or $1.26 per share in the prior-year quarter.

Excluding items, adjusted earnings for the quarter were $1.56 per share, compared to $1.27 per share last year. On average, 29 analysts polled by Thomson Reuters expected the company to report earnings of $1.25 per share for the quarter. Analysts’ estimates typically exclude special items.

Total revenue for the quarter, comprising net sales and membership and other income, grew 5.6 percent to $137.74 billion from $130.38 billion in the same quarter last year. Revenues grew 6.5 percent to $140.2 billion in constant currency. Analysts were looking for revenues of $135.48 billion for the quarter.

Net sales grew 5.7 percent to $136.82 billion, while Membership and other income decreased 7.2 percent to $918 million from last year.

Walmart U.S. comp sales increased 9.3 percent and net sales rose 9.5 percent to $93.3 billion, led by strength in general merchandise and food. Walmart U.S. eCommerce sales grew 97 percent, with strong results across all channels.

Sam’s Club comp sales increased 13.3 percent and ecommerce sales grew 39 percent from last year. Reduced tobacco sales negatively impacted comp sales by 390 basis points.

Growth in membership income was the highest quarterly increase in more than five years. New member count increased more than 60 percent.

However, net sales at Walmart International declined 6.8 percent to $27.2 billion, but grew 1.6 percent to $29.6 billion in constant currency. The government-mandated closure of the company’s Flipkart business in India for a portion of the quarter, as well as similar actions in markets in Africa and Central America impacted sales.

The company also said it incurred incremental costs related to COVID-19 of $1.5 billion.

Separately, Kohl’s Corp. (KSS) reported second-quarter net income of $47 million or $0.30 per share, sharply lower than $241 million or $1.51 per share in the prior-year quarter.

Excluding items, adjusted loss for the quarter were $0.25 per share, compared to income of $1.55 per share last year. Analysts expected the company to report a loss of $0.83 per share for the quarter.

Kohl’s total revenue for the quarter declined 23.1 percent to $3.41 billion from $4.43 billion in the prior-year quarter. Analysts expected revenue of $3.09 billion for the quarter.

Net sales were $3.21 billion, down from last year’s $4.17 billion. The company said it is not reporting comparable sales due to store closures.

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