[Overseas Stocks Spotlight] "Walmart Expected to Strengthen Omnichannel with Walmart+ Launch"

[Asia Economy Reporter Eunmo Koo] Walmart (Walmart·WMT.US), a leading U.S. retailer, is expecting to strengthen its omnichannel capabilities through the launch of 'Walmart Plus (Walmart+).'

On the 12th, Bowon Choi, a researcher at Hanwha Investment & Securities, stated in a report, "Since the outbreak of COVID-19, consumer patterns in the U.S. have rapidly changed, leading Walmart to enhance services such as 'curbside pickup,' which allows customers to collect purchased products outside the store, in addition to its existing e-commerce services," and added, "Starting from the 15th, Walmart will strengthen its omnichannel strategy through the launch of a new membership service, Walmart+."

The second quarter highlighted e-commerce and pickup services. Walmart's Q2 (May to July) sales increased by 5.6% year-over-year to $137.7 billion, and net income rose by 79.4% to $6.5 billion, surpassing consensus estimates of $135.5 billion and $3.52 billion, respectively. Notably, e-commerce sales in Q2 grew by 97% compared to the same period last year. Although the number of transactions decreased by 14%, the average transaction value increased by 27%, driving U.S. Walmart sales up 9.5% year-over-year to $93.3 billion, leading overall sales growth.

While costs increased due to additional hiring and bonuses for employees, overall operating profit rose 8.5% year-over-year to $6.1 billion, supported by increased e-commerce sales and higher-margin pickup service revenues. Adjusted earnings per share (EPS) were $1.56, exceeding the consensus estimate of $1.25.

The strengthening of omnichannel capabilities is also expected to enhance competitiveness within the retail industry. Researcher Choi explained, "Since the spread of COVID-19, the growth rate of e-commerce in the U.S. has accelerated, and after September, expectations for additional economic stimulus policies may be reflected."

He further noted, "Walmart is expanding its competitiveness in the e-commerce industry through partnerships with companies like Shopify, and by enhancing differentiated services such as express delivery and Walmart+ in addition to pickup services, the expectation for additional sales growth driven by strengthened omnichannel competitiveness remains valid."