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 U.S. online sales up 74% for the fiscal first quarter. That trend accelerated to 97% in the second quarter.
Net income for Walmart Inc. reached $6.48 billion in the quarter. Meanwhile, Walmart International, which includes operations in Canada, China, India, Mexico and the United Kingdom, reported net sales of $27.2 billion, a decrease of 6.8%.
Changes in currency rates negatively affected net sales by approximately $2.4 billion. Excluding currency, net sales would have been $29.6 billion, an increase of 1.6%.
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.
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 US$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.
"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 is facing soaring costs related to the pandemic that include mostly extra pay for workers on the frontlines. Walmart said costs related to COVID-19 hit $1.5 billion during the fiscal second quarter, up from nearly $900 million during the fiscal first quarter.