NEW YORK — Americans turned to Walmart's online business as well as its stores for supplies and home goods as the virus surged in new regions, resulting in soaring sales for the fiscal second quarter.
Walmart's online sales nearly doubled in the fiscal second quarter, helped by an expansion of its online delivery services. Sales at U.S. locations opened at least a year jumped 9.3%, the company reported Tuesday.
The nation's largest retailer topped almost all expectations by wide margins and company shares, which hit an all-time high Monday, jumped another 6% before the opening bell only to retreat into negative territory.
Consumers had already begun to rely on Walmart and other essential retailers like Target and Amazon as lifelines for necessities during the start of the pandemic, sending Walmart's online sales up 74% for the fiscal first quarter. That trend accelerated to 97% in the second quarter and broadened the gap between traditional retailers, many of them anchor stores at the mall, and big box operators like Walmart and Target.
With unemployment in the U.S. hitting frighteningly high levels, Walmart's ability to deliver low-priced food, clothing and electronics strengthened its structural advantages further.
Walmart's earnings followed a standout fiscal second-quarter performance from the nation's largest home improvement chain Home Depot, helped by a frenzied pace for do-it-yourself home renovations. The home improvement chain reported on Tuesday a 23.4% increase in sales at stores opened at least a year globally. That's almost twice the 12.2% increase that industry analysts had projected.
Both companies are setting a high bar for the rest of the retailers and are among the few bright spots in an industry mostly battered by the financial fallout of the pandemic.
Department store chain Kohl's reported an adjusted loss that was smaller than expected but revenue fell 23% in during the fiscal second quarter. The results came as Kohl's worked to reopen its 1,100 stores after temporarily closing them all during the start of the pandemic.
Net income for Walmart Inc. reached $6.48 billion in the quarter, or $2.27 per share. Earnings, adjusted for one-time gains and costs, were $1.56 per share, easily outpacing Wall Street projections of $1.22, according to a survey by Zacks Investment Research.
The world's largest retailer posted revenue of $137.74 billion, also exceeding expectations.
However, surging sales took place as the U.S. rolled out massive assistance plans for the millions who had lost jobs or who were furloughed.
The $600-a-week federal unemployment check that had been sent to roughly 28 million laid-off workers is gone. And a $1,200 stimulus check that was sent to many Americans in April and May appears to be a thing of the past. Negotiations in Congress on a new economic relief package have collapsed and there is no evidence of an agreement on more aid, at least in the near future.
That had been a concern for analysts trying to predict how that will influence where Americans shop. Already, Walmart is seeing the expired benefits having an impact on its business.
"As the benefits from stimulus wane towards the end of the quarter, we saw comp sales settle into a more normal range," said CEO Doug McMillon.
Also, Walmart and other retailers are facing soaring costs related to the pandemic that include mostly extra pay for workers on the front lines. Walmart said that costs related to COVID-19 hit $1.5 billion during the fiscal second quarter, up from nearly $900 million during the fiscal first quarter.
This story was originally published at 9:08 a.m.