Walmart (WMT) Q2 2021 earnings call transcript

Thank you, Robo. Good morning and welcome to the second quarter of the financial year 2021 for Walmart. I am joined by a number of members of our executive team, including Doug McMillan, president of Walmart and its executive director, and Berit Dibs, chairman of the executive and financial director, and June Werner, president of Walmart and its executive director in the United States.

After a few minutes, Doug and Berit will present you the latest updates about the company's business and discuss the second quarter's results. and will follow that session of questions and answers.

Before I hand over the word to Doug, I would like to remind you that today's call is recorded and will contain investigative data. This data is subject to risks and doubts that may lead to a difference in the actual results, a fundamental difference from these data. These risks and doubts include, for example, the specific factors in our files for the Financial Paper and American Burses, in addition to risks and doubts about the ongoing COVID-19 pandemic. We will be back with our press release and the release of the relevant documents to find out about a warning statement about the confidentiality of the data, in addition to the statement of the complete security and the data of the non-compliance with the principles of the accepted accountability generally on our website, stock.

walmart. com.

I am now happy to hand over the word to Doug McBillen, the director of the Department of Humanities, as usual, and I would like to thank our colleagues for their work. They are satisfied with the needs of the changing clients and are fighting for new challenges while preparing our work for the future. And we are satisfied with them. As I mentioned in the previous quarter, we work according to a clear set of priorities to direct the decision-making process during these crises. Our priorities are as follows.

First, the support of our colleagues in the front lines in terms of their physical and financial Second, the service of our clients with as much security as possible and to maintain the continuity of the supply chain work.

Third, the help of others. This includes the employment of many people who need to work, and the support of our employers, market sellers, and the service of the societies in which we work, with the speed of our efforts to promote justice and racial equality.

Fourth, manage our business with operational and financial efficiency over the short term. Fifth, push our strategies to promote our business over the long term. First, our colleagues are still an inspiration to us, and I have enjoyed visiting many of them during my tours around the country to visit shops, shops and distribution centers. During this meeting, we explained a number of the procedures that we took to support them, and we are still continuing to apply them. On a global level, we have employed more than 500,000 new employees since the beginning of the year. We have implemented the policy of the special way of quarantine in the COVID-19 pandemic, which includes canceling the attendance requirements related to the seasonal monetary compensation program, which enables employees to stay at home in case of a virus infection or feeling sick or need to take care of others or feeling uncomfortable working.

And on a global level, we paid or announced this year 1.6 billion US dollars as a special monetary reward within the MyShare program to support our employees financially. After supporting our employees, our customers come to our priorities. And in line with our goal, we commit to providing the lowest prices to a variety of goods. During the second quarter, our customers spent longer time in their homes, which led to the rise in sales of categories such as television devices, computer devices, and smart homes. Also, customers took advantage of this time to enjoy and exercise in the hot air, which contributed to the prosperity of these categories. And with the major operating restrictions imposed on restaurants in all parts of the country, families continue to prepare more meals at home, and our work has benefited from this direction.

And as expected, there is still a high demand for cleanliness, cleaning supplies, and paper products. We witnessed, sometimes, a return to storage behaviors in a specific category of food and consumer goods in specific geographical areas that witnessed a surge in the epidemic. And despite the fluctuations in the supply chain levels, we began to notice the recovery of some categories in terms of storage availability.

And in terms of the seasonal, the seasonal return to schools was affected by the health crisis in terms of timing and demand. We have been keen to follow a taught method in our shops and through the internet, and we believe that we are in a good state, whether it is the students or the teachers working from their school or from their homes. Our third priority is the help of others in the communities we serve. I am proud of the many ways in which we support the communities, including our support for food banks. In this quarter, and through our campaign, the fight against hunger, the event of change, and the food donation program, we helped to provide about 300 million meals for the needy.

We also support societies through COVID-19 testing sites, which increase its number from 420 sites in 33 states. Societies have become in all parts of America, and rightly, focus on equality and racial justice, and we are also. Our work within the company begins with our efforts to enhance diversity and inclusion. In addition to that, we established a team to search for opportunities through which we can employ our main and large businesses to effectively influence financial, health, educational, and criminal justice systems in our country. Walmart and Walmart Foundation launched a national justice center and allocated $100 million to fund charity initiatives that complete the company's efforts to develop the four systems mentioned above. Even in the midst of these crises, our team manages our work with high efficiency and implements our strategy to build multiple channels worldwide.

In the United States, we continue to expand the service of reception and transmission, including the fast transmission service, where customers receive their orders in less than two hours. In Mexico, we launched the delivery service on the same day from 70% of Sam's Club stores. And in India, we launched Flipkart Wholesale, which is a commercial solution between companies that allows us to serve multiple channels for the service of small stores in the best way. And that is by joining our businesses in the field of selling in bulk to Flipkart. A big wave has recently spread around Walmart's membership. We started the membership test with the non-limited subscription since the end of last year. The presentation of the customer service was short on the service of delivering food and consumer goods as a reason for the subscription.

Since that launch, we have proven to ourselves our ability to choose and deliver a wide range of products in all areas of major shopping centers, not only food and consumer goods, but also a wide range of general goods. We believe that this diversity in the formation and our ability to quickly deliver on a national level, in addition to some other benefits for customers, will be a great presentation. So we are working on launching a new unit. We will share more information about this unit and its specifications when the time is right.

As for the performance of the second quarter, I will start with the Walmart sector in the United States. The sales of the store were strong again this quarter by 9.3% with the exception of the fuel. There were many positive factors that affected our performance in the second quarter, including government incentives, and increasing food consumption at home, and the interest of customers in home entertainment and investment in their homes and gardens. On the other hand, we faced some challenges, such as the reduction of the hours of work of the stores and the storage of the storage. And with the decline of the benefits of the supply near the end of the quarter, the sales of the stores in the natural sector have settled.

We are pleased with the progress that we are making on the website walmart. com, where we achieved a strong growth in sales and reduced losses in a noticeable way. These positive factors in accelerating and increasing the construction of more consistent electronic trade through the addition of new trade signs, improving the mixture of products, expanding the market and achieving greater efficiency in fixed costs. The companies and electronic trade teams have been integrated, and we believe that we will benefit from this change in the future. Improving the profit margin and reducing operating losses is a very encouraging matter. We have made many institutional changes within Walmart during the quarter, in the context to transform into a multi-channel institution.

These changes have been implemented to increase innovation, speed, and productivity. It is clear that this is a time-consuming time for these colleagues to face changes like this. Therefore, we provide them with additional financial support and enough time to look for another job, in addition to other forms of support to facilitate the matter for them.

As for Sam's Club, the team has grown in sales by 2%, 17.2%, with the exception of fuel and fuel consumption, and the income of the unit increased by 7.8%. We witnessed an improvement in the number of units, the rate of renewal, and the spread of the BALS unit. Also, the popularity of the service, wipe and start, is increasing in a meaningful way, which is a great thing. The value of the unit is strong, and the team does its work with high efficiency. Walmart's sales rose by 1.6% with the fixed currency, and achieved 7 out of 10 positive growth markets in sales. The team achieved good results despite the major challenges we faced due to currency fluctuations and the government's obligation to close the Philip Karte store for about half a quarter, in addition to closing parts of Central Africa and America for other quarters.

Canada, China and Mexico have been exported to the scene, where customers prefer to trade in the form of multiple channels. In India, Philip Karte reopened its doors in mid-May, and then we witnessed a general We have exceeded the total value of the goods sold at levels before the pandemic. And with the exception of fuel, the performance of the company showed the smoothness of its business and its growth during this difficult period. As well as the international profit, which we expected when we removed the effects of the fall of the exchange rates and a separate tax break. I conclude today's speech by thanking our colleagues again for their wonderful work. Our comprehensive offer still attracts many channels with a large reception from customers around the world.

and this has strengthened the company's position during this crisis. We are still confident that it will be a successful strategy in the future. I would also like to point out that we will release our report on the environmental, social and institutional governance next week. I encourage you all to read the report to understand the wonderful work that our team does in this field. I wish you and your families good health and well-being. And now I will leave the word to Barad.

Thank you, Yadu. Good morning, everyone. Allow me to start by thanking our colleagues for their wonderful work in serving our clients during this exceptional period. We face a wide range of challenges daily, and we strive to strengthen the company's position to achieve success. I am very proud of how our team is adapting quickly to the new work methods and responding to our clients' changing needs.

The health crisis continued to affect the behavior of the market during the second quarter, as we witnessed a increase in the size of the market in the shops, as well as the transformation of the marketing channels towards e-commerce. It reminds us that our clients want us to choose multiple markets, and we work on the innovation and the use of our unique resources to provide solutions that meet their needs. Our financial situation is strong to the point that we continue to focus on operating efficiency, even with the presence of additional costs related to the COVID-19 pandemic to support our employees and clients. We have maintained a culture of low cost and have recently taken steps to simplify the institution's structure in a larger way to support our strategy of multiple channels in the United States in a better way.

And now, let us show the results of the second quarter. The overall growth of the stable currency has achieved a strong growth of 7.5% to more than 140 billion dollars, despite the trading restrictions in some markets at the beginning of the quarter. Walmart's sales increased by more than 9%. The global sales level has risen by almost 2% with the stable currency, and Sam's Club's sales have grown by more than 17% with the exception of fuel and tobacco. The overall profit was strong in all sectors, and it rose by 63.1 points for the company as a whole, benefiting from strong sales in the general goods sector with the highest profit margins. which it supported in the United States, the government's incentives, the decrease in discounts and the improvement of fuel costs.

This has been partially compensated by the investment of the remaining prices from the past year. The sales of Sam's Club were affected by about one point five billion American dollars from the additional cost associated with the COVID-19 pandemic, which is about 75% of it in the compensation of employees and extended benefits, including the third special compensation for this year, which was announced recently. The fourth was also affected by the cost of re-establishing business in the United States The US dollar has been raised by about $380 million, in addition to a separate tax fund. In general, this cost has negatively affected the cost of profits by about 130 main points, as a result, the costs have decreased by 42 main points.

The operating income has risen by more than 18% with the fixed currency. The profit of the average share has risen by about 23% to $156 US dollars compared to the profit of the average share in the second quarter of last year. The inflation rate has been affected by the loss of the stock market for about two years. The operating income has risen since the beginning of the year by about 8 billion dollars American compared to last year. The free income has also risen by more than 9 billion dollars American, paid by the increase in sales and the decrease in the level of savings, the continuation of the operating economy and the decrease in capital spending, and part of that returns to the appropriate time.

The savings have decreased by about 7% on a yearly basis, and this is mainly due to increasing demand. While we did not buy any stocks during the quarter, the strategy of specifying the the financial crisis has not changed, and we are still very optimistic about the company's situation. Now, let us discuss the results of the quarter for each operating sector. Walmart achieved strong performance in the quarter, and the sales of the existing stores increased by 2.3 percent, with the growth of the e-commerce sales by 97 percent, and the e-commerce sales have witnessed strong performance throughout the quarter, where a third of the sector's sales have contributed, and we have witnessed significant increases in the number of regular customers and the number of active customers per week.

and we continue to anticipate an advance in the expansion of the formation of sales tools, with the growth of the sales of the electronic trade market by a three-digit ratio, and we are working to accelerate investments in the implementation of the comprehensive, with the continuous expansion of the service of receiving and receiving on the same day to include more stores, and increasing the requirements for receiving and receiving in stores by a ratio of almost 30% since February, and increasing the permanent transformation of store capabilities to levels before the COVID-19 pandemic. The second quarter began strongly with the The growth of general goods in stores and through the internet with the spending of government-funded money. And with the family's long-term family issues, we saw strong increases in the category of home appliances, sports equipment, and the need for garden coordination and electronics.

And the sales of the stock market achieved another strong quarter, with a strong growth in fresh products. And with the decrease in the funding of the quarter, the sales began to return to their normal state, but the sales of July compared to the quarter still grew by more than 4%. And the integration of the trips throughout the quarter continued which led to an increase in the average value of the bill by about 27 and a decrease in the number of transactions by about 14 The total profit ratio reached 42 which is a strong ratio thanks to the increase in sales and the increase in profit on the products and the decrease in discounts We also witnessed an improvement in profit-making rates for e-commerce, which reflects the continuous progress in the mix of products and the faster growth of market sales.

And it affected the continuation of last year's investments in prices, which resulted in the temporary closure of car maintenance centers and vision centers, except for the high profit rate. It also affected the additional cost associated with carbon dioxide emissions, which reached about $1.2 billion, in addition to the cost of the reconstruction, except for the cost of the profits of about 170 points. As a result, the cost of the profits in the American sector decreased by 41 points. However, the main production is strong in all of the actual shops and electronic trade operations. and the operating income increased by 17% approximately during the quarter, which is supported by a large decrease in the losses of electronic trade.

The stock price decreased by 4.6% approximately, which reflects the power of sales and the increase in the stock price in some categories of the natural average. While we continue to anticipate progress in the stock market, there are still some specific areas that are challenging. In general, we are in a good situation. As is noticed in the market, the return season to schools began with a slower pace than usual due to the uncertainty about the date of the return of students to their schools. As a result, we expect the season to be delayed and start late from the usual. It achieves a good performance like the computer, the tablet, and the home computers, while another performance like the school supplies, the backpacks, and clothes is weak, which is understandable.

Despite the slow start of the season to return to schools, the sales performance in the United States is normal to a large extent with a quarter start. As for the results of international markets, it is better than expected with a quarter start. Despite the operating restrictions in many markets due to the crisis, including the the government's closure of the Philippkart company, the sales volume of 1.6% to 6% of the fixed currency has risen, with a growth of approximately 40% in the electronic trade. Seven of the ten positive sales markets were registered. Sales in Canada and China were strong in an exceptional way, and Mexico achieved good results, except for the fuel, since the sales comparison was also strong with the growth of the online trade through the internet at a faster rate than the market, so the customers respond positively to the expansion of the electronic trade and the presentation of multiple channels, which pushes the growth of the electronic trade by a third of the numbers in most of these the market on a yearly basis.

We faced widespread closures by governments in markets such as India, South Africa and Central America, especially at the beginning of the quarter. Flipkart operations were closed for about half a quarter, but since its reopening in mid-May, the value of goods sold exceeded levels before the COVID-19 pandemic. In Africa, about a quarter of the shops were closed for part of the quarter, and some of the goods of the same size were restricted. In the United Kingdom, the decline of travel led to an increase in sales. The The exchange rate has been greatly affected by the price of almost $2.44 billion. During the quarter, the international operating income has decreased by about 9% on a public basis, but it has risen by 11.5% on a fixed currency basis, except for the previously announced separate tax.

During these difficult times, we have been implementing our strategy to build strong local companies supported by Walmart, and we have announced additional investments in China and India focusing on strengthening the position of our business reserve to achieve growth. On the one hand, we are excited to launch Flipkart Wholesale, which builds an electronic market between B2B companies to help small companies in India to buy directly from manufacturers and producers. We will also continue to value opportunities to enhance our positions in all areas of our business.

Sam's Club achieved another wonderful quarter with a strong growth in sales compared to 17.2% with the exception of fuel and fuel, with positive contributions from each of the increase in transactions and the average value of the bill. The sales of the electronic trade increased by 39% with a strong demand for direct delivery to homes. The company showed a wide range of strengths across the categories, including food and consumer goods, which were particularly strong. Our trade mark also achieved good performance for members. The strength of strong growth sales reflected in the number of members and the benefits of government incentives. We are happy with the strong directions of the membership in Sam's Club. The membership income increased by 7.8% in the second quarter, which is the best quarter performance in more than five years.

The new members' ratings and subscription updates were very strong, and the increase in membership rates reached a historically high level. The company also received additional benefits related to the COVID-19 pandemic. However, the additional costs, which amounted to about $200 million, were compensated by the strong total profit, which led to an increase in the operating income of more than 24% without the cost of fuel. In addition to our statement for the first quarter, we will not provide financial expectations for the financial year 2021, given the continued uncertainty about the main external changes related to the health crisis and its possible impact on our business and the global economy. The health crisis has created positive and negative factors for our business.

In the second quarter, we witnessed stronger sales than expected, and that returns in part to the purchase and supply operations. But the future government supply period is still uncertain. In the second quarter, the supply and supply contributed to improving the mix of our sales, thus hampering the overall profit and the operating profit. We also managed to manage the increasing operating complexity and incurred additional The price of the company's sales will be higher than the average price of the company's sales. We thank you for your interest in Walmart and we are happy to receive your questions.

Thank you.

Hello Karin, with you John Fair. Good morning, thank you for your question. As we mentioned, the e-commerce has risen by 97% this quarter, and we are excited to join new customers and keep customers' rates. I also think we are happy with the vision of improvement and diversity in the categories sold through the Internet, which is a little related to your second question. We have achieved stronger growth rates in all home products and clothes through the Internet. Home products were also strong in the shops, where customers moved to their homes and and now they have started to implement the education system from a distance. They were all strong businesses.

As for the third point that you mentioned, which is the e-market, which is a very important part of the strategy, it has achieved a very good performance during the quarter. In addition to the e-market, we have opened new tools for suppliers or sellers, including the service of implementing special orders by Walmart, which is now a small project, but it works with all its power, and we are excited about the opportunities it offers. So, once again, the team did a great job during the quarter in responding to customer changes and their directions. The number of customers who buy from Walmart through the Internet increases, and we are happy to see new customer profiles and customer retention rates.

Hello, thank you, Paul.

This is Preet. I'll start. As we mentioned earlier, we did not receive any guidance for the rest of the year. And as you can imagine, the fluctuations that we witnessed during the past five months led to this decision. In the second quarter, there were factors that helped the company, including the economic incentive group and other factors that formed challenges in front of it. And we know that we will continue to witness the confrontation of these challenges and opportunities in the third quarter and the second half of the year. Therefore, the balance of these factors and their expectations makes it difficult to provide directions for a long time, and for this reason we did not do that.

And as we mentioned, the return of students to schools is longer than usual, and this is a concept given the current circumstances and the speed of their return to the academic years.

Wow, good. We will not talk much about this subject, given everything that is happening now. I would like to add, especially when it comes to going back to schools, that it is just part of the quarter, and we will work to determine how the customers will be marketed gradually. But we believe that we are in a good state of storage, and we will deal with each branch on a level. I don't think we are facing great risks in this regard. The risks of sales will be different during the quarter, and we will handle other aspects of our work.

As for the membership question, I think from the customer's point of view, they will continue to receive low prices daily, and they will continue to receive the large form that we sell in stores, in addition to the increased form through the Internet. But the reason that might push them to subscribe is the increase in the level of service that we provide, which starts with the service of receiving and connecting. And if you want to receive your orders from Walmart repeatedly, it will be better for you to buy the products in large quantities. And this is done through annual membership, and we will add other non-connective features to it to become a complete membership. And it will be a strong relationship with the customers and encourage them to repeat the purchase, an important aspect that the company must focus on.

We will also benefit from the data and learn how to serve customers in a more effective way with the growth of the members. In short, I think it's about the customer experience, and we always emphasize that the sales strategy of multiple channels is a successful strategy, and we mean that the client is the owner of the final decision.

We will be training and we will provide multiple ways to serve them, and families will decide at that moment how they want to trade. Sometimes they will shop in the store, sometimes they will receive their own purchases, and sometimes they will ask for the service of the delivery. Many of them will participate in the membership, and they will get their benefits. We will ensure that we manage it in a way that enables us to maintain our low prices and provide low daily offers to the clients who actually need this value and focus on the points of the price of the subscription.

And we will manage the profits and losses in a way that prevents any kind of risks for them.

Yes, this is a doubt. I will start with Flipkart, then John. Can you talk more about the membership? As for Flipkart, I think we are completely satisfied with the course of things since our investment. And how I dealt with the difference with the environment of the Covid-19 pandemic with high efficiency. And it was wonderful to see how the volume of sales returned just after the government's restrictions were lifted.

And we follow their decisions and are excited for their future strategy. We wanted to, through the investment, be sure that they have the sufficient liquidity for work. As you know, this is a big opportunity. and the size of the market in India is huge. We want to be in the lead of the competition and take leading steps. So we do not focus much on evaluating the short term. Over time, I think everyone will realize the value of this commercial activity in India, whether it is the Flipkart section or the payment section via the phone.

And Simi Yuna, good morning. Thank you for your question about the membership. As you know, it is important to admit first that our strength in this commercial initiative is to provide a wide range of daily products at low prices through multiple channels, and this will not change. But what we think about the unit, as Doug said, is how to simplify the customer experience and facilitate the access to these products at low prices daily through multiple channels. So, we don't have much to present this morning, except that we say that in addition to the connection service, which we tested last year through the non-limited connection program, we are confident that it is a great basis for our presentation, and we will have more to present when we are ready to talk about it.

As for the year, our sales growth in the stock market has reached a little more than 8 billion dollars, so it is a very large profit in dollars. We kept our prices at their levels throughout the quarter, and as a store, we offer low prices every day. We have seen a one-off selling average, which led to large price gaps, and even larger price gaps in the second quarter compared to the first quarter. Perhaps this is an important point to determine the differences. Then there are two things we focus on, and they are the challenges we face. First of all, there is a large level of savings problems that occurred in the last quarter of the first quarter and the first quarter of the second quarter.

While we believe that our storage levels have begun to return to their normal state, we still have some problems related to the lack of storage, which are related to the supply chain, in addition to other factors related to the pandemic. The last thing we do is change the closing times of 4,100 stores from 8.30 pm to 10.00 pm. We believe that this was an effective action, especially during the summer months with the delay of daytime hours. But if we look at the whole process, the positive side is that we believe that Walmart has achieved profits in its market share. The sales of general goods were strong to the extent that it seems that the profits in this share have compensated for any possible losses in the sales of food.

But the data is still incomplete, and we will continue to evaluate the situation over time, and we will be able to determine the final results over the long term. But in general, I am very proud of the way the team responded to this radical change in marketing methods. We have seen large increases in sales in the last quarter of the first and the first quarter of the second, and the team has made a great effort to deal with that.

Hello Keith, with you John. of the business sectors, which is considered a group with a higher profit margin. Second, our electronic market performance was strong, and it is also an creative sector compared to the rest of the business sectors.

Third, we are excited about the way of work. The goods and supply chain team has merged, and we now have merchants and employees in the supply chain responsible for the work through all channels. Therefore, Walmart should be able to achieve more benefit from that as a company. But as you know, the benefit of a stable and improved profit margin, in addition to the profit margin resulting from all the benefit from the resources and the mixture of sales, contributed to the reduction of losses during the quarter.

So it is a traditional demand directly to the homes. We have new clients and we have clients who buy more. So there are positive aspects. As for what if there is anything related to this second quarter considered a bad situation, I think it is one of the previous reasons for the impasse. As we mentioned, we are not able to predict or present any directions that exceed what happened in the second quarter. It is certain that there are strong actions in the field of homes, where people were moving to new homes and building home offices and buying office equipment. It is not yet clear when this direction will continue, but there are other strong areas also within the business of electronic trade, and in every place we see challenges, we also see opportunities.

Therefore, we will have to deal with these issues during the next two weeks.

in Georgia and Arkansas, and we expand in Florida. And later this year, he also announced the opening of two events in Chicago. Well, for the Americans who are looking for high quality health care at reasonable and transparent prices, Walmart will be an excellent choice for consumers, and we are committed to supporting the health care sector.

Hello Peter, with you Doug. I would like to add that we recently opened another event near Bentonville in Elm Springs, وهي أصغر من تلك التي رآها بعضكم في دالس جورجيا أعتقد أن هذا مثال على محاولاتنا لتحديد الأحجام التي نحتاجها والمساحة المطلوبة والاستثمار في المعدات وكل هذه الأمور كما هو متوقع نحن نجرب خيارات مختلفة وكان من المثير للاهتمام مراقبة كيفية تفاعل العملاء مع هذه التجربة في ظل جائحة كوفيد سالب 19 19. The team does a great job, doctors and other specialists in the community, in maintaining the safety of people, and the demand is still strong in the context of an environment in which people do not necessarily benefit from a lot of preventive care.

Thank you, Bobo. I will start. I am.

This is a doubt. As you know, it is obvious to say this, but there is a lot of Uncertainty currently and a great difference in the feelings of the customers towards their position. And the decision that the government makes to take it in the interest of the fourth stage A important decision. And I think it is of great importance in what is related to small companies. The economy of this country depends largely on small and medium-sized companies. I think that the big companies have begun to organize their situation, and the government is taking care of the big companies that need some kind of financial support. But we all have to watch closely the small companies sector in particular, and we will determine the best economic shape after the end of the fourth stage of the incentive.

And I think, Bobo, I would also like to add that we see with certainty a number of consumers in the United States, but this feeling is a little less than it was a year ago. Then we also think about the number of consumers who think about job security and other opportunities. I think that people generally feel that they spend more money on food, despite eating food in restaurants less. Therefore, I think that we will be well trained in how we plan for the rest of the year, We will be working hard and we will interact with changes in the directions that we see from our marketers.

Yes, thank you, Jerry. So, the amount of $900 million that we paid in the first quarter is equal to $1.5 million in the second quarter, or sorry, $1.2 billion, which is the amount that we paid in Walmart in the United States only. About 75% of these costs are related to rewards, salaries, benefits and similar to employees. A quarter of these costs are almost related to cleaning and cleaning and other things inside the store. It is certain that part of these costs will continue for the rest of the year and maybe until the next year as well. So, our ability to continue thinking financially about this matter with a care for safety.

Our employees and employees are our top priority when handling these costs. It is clear that we will continue in this path in the future. The total of the rewards is a little higher than the previous quarter.

The third reward that we announced was dedicated to the second quarter, so it was taken into account. This will be an additional reward compared to what you saw in the first quarter. And this is the main difference. Thank you.

Hello, Oliver. I will start with your question about the ATM. First, we have done two experimental projects where we have been able to get an ATM, and increase the number of requests that we can deliver from the store. We have a store in New Hampshire called Alert, which collects stock purchases and helps in everything to deliver them. and we will expand this experimental system to include Texas in the coming few months.

Therefore, I think we are optimistic about the number of requests that we will be able to receive through these combinations in the future. As for the customers who receive their purchases today, whether they are interested in the delivery service or not, I think what we learned from Delivery Unlimited is that there is a wide range of people who appreciate the delivery service and looking for ways to buy and pay their prices, as Doug said, in large quantities. So I think most of them are the same customers. Of course, we will learn more as time goes by. But Americans all over the country are looking for rest, with low Walmart prices daily in addition to comfortable transportation.

Well, we see a lot of customers interested in this type of service. One of the good things is also the vision of the Sam's Club team launching a car service at this speed. And I think that when small companies return to work, we will be fully qualified to serve larger businesses, which do not happen currently due to the closure of restaurants, as will be the case after the end of the pandemic.

Yes. Hello, Keeley. Good morning. We are excited to enable customers to access products and prices at Walmart in any way they choose. As for the delivery services, as you mentioned. Okay. Then the specific question about the Instacart app, which is a test in California and a single market in Oklahoma. What we hope to know is what if the combination of these two tests enhances the value that Walmart offers. Thank you.

Hello Eduardo. As for the hamish, we do not separate the data according to the month, but on the quarter the results indicate a stronger mix in exports and a decrease in declines as a result of the rise in the prices of general goods.

As for the holiday season, we are now in August and we are at the beginning of returning to schools. Therefore, we think financially about each holiday on a level and how it can change as a result of what happens. But as is the case with schools, we still learn daily which schools are open or planning to open their doors. And I think we will have to make decisions about each holiday that we will witness during the next two months with the approaching date. So the team works very hard to put the plans and the emergency plans to ensure our readiness to the customers. They want to trade and have actually turned to buying through the Internet, as is clear from the rise in our sales through the Internet by 97%.

And with the increase in the service of the reception from the store, we will make sure to provide both the reception options and the trade in the store. So no matter the way of trading that the client prefers, we will be most prepared.

Yes, shut up, this is June again. As you mentioned earlier, we achieved a high growth rate from the first quarter in the food sector. And we witnessed a stronger growth in the general food sector. And the growth of food sales in the quarter reached about 3 billion dollars. What we really focus on is the change in the number of food delivery trips.

Where we witnessed a big increase in the average cost of the bill. Then internally, as you mentioned earlier, we work to solve the problems you face, as more than 4,000 stores have been reopened until 10 pm. We believe that this has had a positive effect. At the beginning of the first quarter, we faced a number of problems related to the lack of storage, and Walmart has improved over the years its ability to manage an active supply chain. and with the sudden rise in sales at the beginning or end of the first quarter and the beginning of the second quarter, it was a great impact on our business due to the lack of storage. But as you know, I feel a great improvement now in terms of the levels of natural storage and storage.

We will now work on the treatment of various categories and problems related to the supply chain, which may not be able to meet the requirements at the right time. But in general, the levels of storage return to their natural state.

Therefore, we are re-evaluating how the remains are advanced on our clients and their needs dynamically. Thank you. The business of e-commerce has grown faster than the general market, but the value of purchasing from the store is much greater than what is seen by a marketer inside the store. Then we move to the market and the communication services. Well, once again, we are still at the beginning of the road, and only a few seasons have passed, but we are excited about the leadership and the team and what they offer to the sellers. This, in addition to the e-markets and other relationships that allow the sellers to and we are excited to see the success of these projects.

Regarding the future, I would like to remind everyone that we currently have stores, reception services, transportation, and a development center to meet the requirements of e-commerce and a wide range of opportunities. Therefore, we are fully prepared to serve them in the way they prefer and the way they want to be in the market. For the sake of the future, we are ready to offer our services to the world. We are ready to serve them in the way they prefer and in the way they want to be in the marketing. So I think we have the necessary flexibility to respond to the requirements of 2021 and beyond. And the team is making great effort to respond quickly.

And the work speed has accelerated inside the company. Well, we feel a kind of smile when we think about the vacation. Because while we have to plan some aspects, We are doing things more effectively than we used to in other circumstances. So I think we are ready to have a business that grows rapidly and to manage its profitability. It was good to see in the past few years the growth of our business in the field of general goods through the Internet. As you know, we have added a lot of trade and product signs. Then, in the last quarter, the situation was unique because many people were in their their homes and contributed. The implications of motivation in supporting the purchase of things that they use in the home to entertain themselves or to renew their homes.

So this situation is unique. But the common denominator is that the general goods in Walmart are strong and that the percentage of electronic trade in profits is a encouraging indicator. So I know that you all are trying to know how the future will look. I think we are in a good position, basically. And we will keep the position short to respond to the available opportunities.

Thank you.

Thank you, it will be much better. It looks much better. We have reached that. Canpreet reminded us this morning, that every time sales increased, all other aspects improved. Therefore, let's do that and we will try to follow up. I think John has already exposed the components of the electronic trade. I will not repeat all the details, but there are important aspects in the profits and losses of the electronic trade that are moving in the right direction. And it was like that before. But these volatile circumstances contributed to the acceleration of this growth. So, we do not know how the economic situation will be in the United States next year. We have to wait and see.

But his idea of ​​multiple channels is widespread within the company in all parts of the world. We focused on this discussion greatly on the United States because your questions were directed to it. But if you look deeply into what is happening in Walmart and look at what Canada has actually started, you will find that this approach has become more popular. And of course, we learn a lot from Philip Kirt and how he did it. But these discussions about strategy, profits and trade losses The electronics have become more scarce from one country to another.

As for the general profit, we have covered several different aspects I mentioned earlier. It was a big part of that mixture of factors.

Well, as Doug mentioned, we focused heavily on our work in the field of general goods.

Edward, regarding the delivery service for the last mail, today we are delivering from about 2800 stores, with the expansion of the coverage area. We now have a fast delivery service, which is a service that you can expect to receive your order in less than two hours, and in some cases faster than that, in about 2000 stores. These are big numbers and continue to increase. So I think that Walmart's ability to expand the delivery service is strong. The Spark CC program is a program that we are operating. As you know, mainly in the middle of the country, in the Middle West. And it achieves good performance and grows. And we are excited about the innovations that the team at Spark is working on to make this business platform easy to use for drivers and others.

As for the last question, Eduardo, I think that the order of factors that affect the work was as follows. First, the motivation. Second, eating at home. Third, being at home and everything you do to make your internal and external times more enjoyable. And you will not spend money on travel and accommodation and the like. So, this money was available to you to buy home necessities as well. These are the factors that had a greater impact than the other competitors open or not.

Yes, for example, Beno, we used to think that about 25 million Americans were practicing fishing in a regular way before February, and this number has now risen to 35 million, which means that 10 million people have decided to practice this hobby only. And so is the case with riding bikes and golf. Yes, air bikes are exactly like golf. We have stopped selling fishing equipment in the store this week, and we are still We are only committed to providing basic hunting tools, such as traps, traps and what similar, which require a period of waiting.

It differs from what current conditions require.

The head of the laborer and how we think about specifying the head of the money in a general way did not change.

We will continue to support our work. I noticed a slight decrease in the returns of the head of the money, but I think this is related to the timing. We do not want to block our stores in the light of everything that happens. We have collected more cash flows than usual, and part of that is that we are We have achieved more cash flows than we had previously achieved. But it is also good that we have some additional flows, in order to provide new opportunities and to ensure the protection of our businesses.

As for the financial sector, I do not see any changes in this regard. Thank you.

Thank you for your attention and participation today. Thank you all.