Deutsche Bank has identified Walmart’s international operations as a key growth driver, citing a 7.9% increase in net sales in constant currency during the second quarter. The bank’s assessment follows Walmart’s earnings release, which showed broad-based expansion across major markets including China, India, Mexico, and Canada.
The retailer’s international segment reported a 5.7% rise in operating income on a constant-currency basis, translating to a 16.6% increase on a reported basis. Deutsche Bank attributed the improvement to strong performance in China and India, alongside reduced losses in e-commerce. Gross margins declined by 15 basis points due to pricing investments and shifts in store formats, while selling, general, and administrative expenses improved by 29 basis points.
International e-commerce sales grew by 19%, representing roughly 30% of total international revenue. Fulfillment efficiency also strengthened, with 65% of online orders delivered on the same day or next day, including about half within an hour. Deutsche Bank emphasized Walmart’s ability to integrate physical and digital channels as a competitive advantage.
In China, Walmart’s net sales surged 20.7%, outpacing all other international markets. Comparable store sales rose 9.7%, while e-commerce sales climbed 26%, now accounting for 55% of total market revenue. The company opened four new Sam’s Club locations during the quarter, bringing the annual total to 11 new stores in the country.
Mexico’s Walmex unit reported a 3.2% increase in net sales, though comparable store sales growth slowed to 1.9% from 4.1% in the prior quarter. Gross margin compression reflected pricing investments, while operating income declined as Walmart allocated capital to wage increases, store upgrades, and e-commerce infrastructure. The company also expanded its marketplace platform during the period.
Canada posted a 6.0% rise in net sales, with comparable store sales up 6.1%. E-commerce growth accelerated to 35%, compared with 31% in the previous quarter. Walmart launched its Walmart+ subscription service in Canada and expanded U.S. marketplace capabilities into the market, further integrating cross-border digital commerce.
