Walmart Inc. said its consolidated sales rose 4.8% in its fiscal second quarter and online sales grew more than five times that rate.
In the second quarter of fiscal 2025, which ended July 31, 2024, Walmart’s consolidated revenue increased to $169.34 billion, up 4.8% from $161.63 billion in the second quarter of the previous year. At the same time, Walmart’s consolidated operating income increased $0.6 billion year-over-year, an increase of 8.5% – nearly twice the rate of revenue growth.
In a conference call with investors, Chief Financial Officer John David Rainey said advertising and memberships accounted for more than 50 percent of Walmart’s year-over-year operating profit growth in the quarter.
“So far, we have not seen any weakening of consumer sentiment overall,” said CEO Doug McMillon in the conference call.
McMillon added that Walmart customers and members always value value, a wide range of items and services, and convenience when shopping.
“We are cutting prices because it’s about value,” he said, adding that Walmart in the U.S. has seen more than 7,200 price cuts across all categories.
Walmart is ranked No. 2 in Digital Commerce 360’s Top 1000, North American online retailers’ ranking by web sales. Additionally, Walmart is ranked No. 9 in Digital Commerce 360’s Global Online Marketplaces Database, third-ranked Digital Commerce 360’s ranking of leading online marketplaces by gross merchandise value (GMV).
Walmart online sales far exceed second quarter sales growth
In the second quarter of fiscal 2025, Walmart’s online sales rose 21% worldwide. Walmart said its online marketplace and in-store pickup and delivery drove that growth. In addition, global e-commerce penetration was “higher across all segments,” the retailer said in its earnings release.
“Pickup is growing faster than our in-store or club sales, and delivery is growing even faster than pickup,” McMillon said. “Delivery accuracy and speed are constantly improving.”
The number of items and sellers on Walmart Marketplace continues to grow, McMillon told investors. In addition, Walmart Marketplace sales increased 32% year over year in the second quarter. In Mexico, Walmart was able to increase the number of sellers and items on the Marketplace by about 60% in the second quarter.
Walmart’s online sales have grown more than 20% year-over-year in five of the last six quarters. In addition, Walmart’s e-commerce sales have grown more than 10% year-over-year in nine of the last 10 quarters.
Rainey said Walmart was “encouraged by margin progress in its core e-commerce business, largely driven by another quarter of nearly 40% reduction in net shipping costs per order in the U.S.”
Walmart and Sam’s Club second-quarter online grocery sales
In the US, for example, Walmart’s e-commerce sales grew 22% in the second quarter. Online sales at Sam’s Club in the US grew by the same amount. At Sam’s Club, Scan & Go penetration exceeded 30%. Scan & Go is a feature of Sam’s Club’s mobile app that allows customers to scan items in stores and pay for them using their phone.
Meanwhile, Walmart’s international e-commerce sales rose 18% in the quarter. In China, Walmart increased the number of e-commerce orders delivered within an hour by 28% to 59 million orders, Rainey said. And in Canada, Delivery Pass members accounted for more than 40% of grocery delivery sales, with order frequency significantly higher than non-members.
Also related to grocery, in India, Flipkart’s grocery business grew by over 50% and offers next-day delivery in over 200 cities, Rainey said.
Walmart drives e-commerce sales and fulfillment with generative AI
McMillon said the retailer is pleased with its efforts to improve its supply chain automation, using generative AI to improve both the customer and employee experience.
“One example is that we’ve used generative AI to improve our product catalog,” McMillon said. “The quality of the data in our catalog impacts almost everything we do, from helping customers find and buy what they’re looking for, to how we store inventory across the network, to how we deliver orders.”
Without the use of generative AI, he said, Walmart would have needed nearly 100 times its current workforce to do the work in the same amount of time.
In the U.S., more than 45% of Walmart e-commerce fulfillment center volume is now automated, Rainey told investors. Walmart has about 1,800 stores that receive freight from 15 of its regional distribution centers that are in varying stages of automation implementation, he said. As a result, Walmart’s supply chain teams are processing more units through their distribution and fulfillment centers.
McMillon added that Walmart Marketplace is one area of opportunity to better leverage generic AI. Walmart Marketplace is currently testing an experience among select U.S. sellers “that allows them to ask us anything,” he said.
“We want our sellers to focus on selling, so the more seamless we can make the experience, the better,” McMillon said. “The new assistant quickly summarizes information and provides the seller with concise answers without having to wade through lengthy articles or other materials.”
Revenue from Walmart Connect advertising business
Globally, Walmart increased revenue from its Walmart Connect advertising business by 26% in the second quarter of its fiscal year. In the US, Walmart Connect revenue increased by 30%. International advertising revenue increased by 23% at the same time.
McMillon said advertising revenue generated by marketplace sellers increased by nearly 50%.
Walmart Plus and Sam’s Club memberships
Walmart Plus memberships grew by double digits, McMillon said, without quantifying the growth. Globally, membership revenue increased 23%.
He added that Sam’s Club in the U.S. posted a new membership record. Although he did not specify the number of members, Walmart said membership revenue at Sam’s Club US increased 14.4 percent.
Rainey said Sam’s Club is growing its membership across all income brackets and among younger consumers. Generation Z and millennial consumers made up about half of new members in the second quarter, which he called a “positive signal for the company’s future growth.”
Check back later for more earnings reports. Walmart’s latest quarterly report can be found here.
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