Walmart's foot traffic falls, but sales soar: it's the "XL-Sized (e)Cart" earnings report
Snacks / Wednesday, May 20, 2020
Padding required to make it through these aisles... Walmart, aka the largest US retailer, just unveiled a value-sized cartload of earnings. The numbers are for February, March, and April — half semi-normal, half full-blown pandemic. Walmart's corona-conomy success is far from shocking, but it tells an interesting story:
- -5.6%: Walmart's foot traffic actually fell almost 6% compared to last year. Buuut...
- +16.5%: Spending per transaction jumped, meaning Walmart carts were 16.5% fuller — shoppers visited less, but stocked up more.
- +74%: Online sales soared, thanks to Walmart's meaty e-grocery operation— 3.2K locations were hot on curbside pickup, while 1.6K made delivery dreams come true.
- +10%: How much total sales surged compared to last year. Despite the $900M the 'Mart dropped on COVID-related expenses (like hiring 235K extra workers), it still had a higher operating profit.
Like that 21+ ID card... Walmart's got a cool ID of its own — it's part of the "Essential Club," aka the group of businesses that are allowed to stay open during lockdown periods.
The biggest 2020 stock driver: are you e-ssential?... There are two major components that influence a company's corona-conomy success, and Walmart checks both boxes:
- Essentialness: When mandated shutdowns for non-essential businesses started, stores like Kohl's couldn't suddenly start slinging groceries to qualify to not have to close. And sales that would have happened at Kohl's probably happened at Walmart instead (again, because Kohl's was closed).
- E-Readiness: Companies like Walmart, Amazon, and Target already had robust ecommerce platforms built out pre-corona (their stocks are trading near all time-highs). Companies that aren't as digitally-savvy suffered — Kohl's stock is trading at 1998 levels.
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