Deutsche Bank has raised its assessment of Walmart’s international growth strategy following the retailer’s second-quarter results, citing accelerating e-commerce performance and operational efficiencies across key markets.
The bank highlighted Walmart’s 7.9% net sales growth in constant currency for the quarter, alongside a 5.7% rise in operating income on the same basis. Reported operating income increased 16.6%, driven by gains in China and India and reduced losses in e-commerce. International e-commerce sales expanded 19%, now accounting for roughly 30% of total international revenue. Same- or next-day delivery was achieved for 65% of e-commerce units, with nearly half delivered within one hour.
Walmart’s marketplace platform expanded into Mexico and Canada during the quarter. Gross margins declined by 15 basis points due to price investments and format mix shifts, while selling, general and administrative expenses improved by 29 basis points.
In China, net sales rose 20.7% year-over-year, with comparable store sales up 9.7%. E-commerce sales increased 26%, now representing 55% of total sales in the market. The company opened four new Sam’s Club locations, bringing the annual total to 11 new stores.
Mexico’s net sales grew 3.2%, with comparable store sales up 1.9%, a moderation from the 4.1% gain in the prior quarter. Operating income declined as Walmart invested in wages, store upgrades and e-commerce infrastructure, while gross margins were pressured by price promotions. The marketplace platform was also launched in Mexico during the period.
Canada reported net sales growth of 6.0%, with comparable store sales rising 6.1%. E-commerce sales accelerated to 35% growth from 31% in the prior quarter. Walmart+ membership was introduced in Canada, and U.S. marketplace capabilities were extended to the Canadian market.
