Walmart’s E-Commerce Surge: Can Digital Growth Offset Rising Cost Pressures in Q3?

Core Insights - Walmart's digital transformation is proving effective, with e-commerce being a significant contributor to its fiscal second quarter results [1] - The company is set to report third-quarter earnings on October 20, with investor focus on sustaining momentum amid cost pressures and cautious consumer behavior [1] Q2 Performance: E-Commerce Takes Center Stage - Walmart's global revenue for Q2 reached $177.4 billion, a 5.6% increase from $169.3 billion the previous year [2] - The e-commerce segment saw a remarkable 25% year-over-year growth, significantly outpacing the overall sales growth rate of 4.8% [3] E-Commerce Growth Dynamics - E-commerce growth was broad-based, with U.S. operations (Walmart and Sam's Club) achieving 26% year-over-year growth, while international e-commerce grew by 22% [4] - In China, over half of total sales now come from online channels, highlighting the strength of e-commerce in that market [4] Market Share and Customer Base Expansion - CEO Doug McMillon noted that increased transaction volumes and units sold indicate Walmart's success in capturing market share across various income levels, particularly among upper-income households [5] Profitability Inflection Point - Walmart achieved its first profitable quarter for e-commerce operations globally in May 2025, with continued profitability growth in Q2 [6] - Key factors driving profitability include a nearly 50% increase in delivery from stores and a 46% year-over-year growth in the advertising business, which provides a high-margin revenue stream [6]