Walmart (WMT) Q2 2027 earnings call transcript

Good morning and thank you for joining us. I would like to start by thanking our colleagues from all over the world. Their commitment to serving customers and members every day is what pays our jobs. And the results we achieved this quarter are very reflective of their work. This is a good quarter, Lam, Walmart, and it proves once again that our strategies succeed. We have invested in it for years, and today I am more optimistic while seeing the elements that strengthen each other in an increasing way. A strong basis for trading in the side of faster-growing businesses such as markets, advertisements and organizations. The account is not just 1 plus 1 equals 2.

The value comes from how these companies work together, as it strengthens each of them and expands what the company can do with it as a whole. And with the expansion of these businesses, they become a more important part in our mix and change the shape of our businesses. We accelerate growth and improve the company's economy in general.

The model works and we are confident in its ability to push for sustainable growth for a long time and achieve value for the contributors. The main works continued to perform well during this quarter, and the results came to a large extent with our expectations, which were slow in the growth of the sales compared to the first quarter. In general, we continue to gain a larger share in the market. We have increased the size of units and transactions, and the ownership of the memberships has reached a level of 17% growth. We achieved another quarter of strong growth in the electronic trade by 23% globally, with the tenth quarter growing by more than 20% for Walmart in the United States.

We also expanded our platform's business segment, such as Walmart Plus and Market Police, to markets outside the United States, which shows how we benefit from it to achieve growth. While we build these capabilities and expand its segment through markets and start working globally on the platforms that we have created over the past few years of transformation, we see the same dynamic. The United States has achieved a growth of 4.4% in the United States. The international sales have risen by 7.9% with the leadership of China and India. For Lowell Mart in the United States, I feel satisfied with the quality of the basic business performance. The team has achieved strong growth in sales in groups such as games, food stores, and fresh products.

We still see growth in the high income families. Organizational changes related to the fair prices of raw materials for some businesses have affected the sales of the stores, which are listed at 125. The US will discuss additional details about the construction of the store's sales in the United States and will discuss the additional additions that we have presented in the profit show today.

Moving on to profits, the operating income has increased by 17.4% with the fixed currency. This includes the benefit resulting from the acquisition of excess money from the national accounts during the quarter. As we mentioned in the previous conversation, our goal was to redirect a large part of that to support prices, and this is what we are doing now. The most important thing is that our main profit growth came according to what we expected, except for this advantage. Because of our strong growth in wealth and profits, we have completely raised our targets for the year. And now, allow me to talk for a moment about our specific growth engines.

First, everything we do starts with the service of customers and members as a multi-channel sales department. And the core of this is to provide value and maintain our leadership in prices. As we said after the first quarter, the customers tell us that they still feel some pressure, but the matter is clear. Customers are looking for value and rest and want to get things quickly. And this is the field in which Walmart is involved. If you provide the best prices for a basket of goods, it will help us to build trust with our customers and members through their help to save money in a time when many families run their budgets with care. Walmart, in the United States, has made more than 11,000 sales decreases during this quarter.

This is a rise of 7,200 sales decreases at the end of the first quarter, which proves our commitment to investing in prices. We invest in prices because our customers need it. And because we believe that this achieves profits in the market over time. Our prices are higher than traditional grocery stores here in the United States, and they continue to expand. The profits we achieved in the market share of this channel continued to the side with the pharmaceutical and retail stores. Another field I want to shed light on is our continuous strength in e-commerce. The sustainable growth that we witnessed in e-commerce through the company over many years points to more than just a digital success story.

It is evidence that customers and members choose Walmart in an increasing way because they know that we combine low prices through a wide range of products and between speed and rest. It represents the electronic trade mix for Walmart, the international company, now 30% with a strong growth, again this quarter in China, India and Canada. The growth reached 19% in the second quarter. Samsung Club achieved growth in the United States in the electronic trade by 26%, with the high of the delivery from the club by a three-digit figure after the launch of the delivery service within one hour in April. Walmart achieved growth in the United States by 24%, the e-market by 52%, and the ads by 38%.

We believe that one of the factors of this growth is our ability to connect quickly. Customers and members around the world get high-speed connections to channels that contain medicines, fresh products, frozen products, and general goods, usually in less than 30 minutes. The rapid delivery rate increased by 48% during this quarter. Speed is important, and we have a great competitive advantage.

Our financial fingerprint, our infrastructure for implementation, and our local delivery capabilities allow us to approach more customers with the protection of a very expensive structure. We have now expanded the delivery service in less than 30 minutes to include 38 stores here in the United States, which allows millions of additional customers to arrive at a faster execution for the students. and speed is not just a measure of execution, but a strategy to attract customers. Customers who use fast transmission trade with us repeatedly and deepen their interaction with us, and it is advisable for them to become members of Walmart Bliss. The progress that we make in the speed of transmission creates an additional reason for customers to choose Walmart in more marketplaces.

This is an important transformation in our way of thinking about growth. While we are becoming faster, we do not have enough to take a portion in the traditional servings, so we work on expanding the number of occasions that Walmart can serve customers, such as food delivery. In the past, customers may have thought of Walmart as an essential for the grocery and general goods. Today, we expand to what is further from that. It allows us to solve meals and ready-to-eat food companies, such as the one we announced and speed up the participation of the implementation in a larger share of daily spending on food. This is an exciting opportunity, and we are just beginning it. The third field that I would like to shed light on is the strategy of our platform.

We are building capabilities that have become able to expand in an increasing way through markets. The market services, implementation services, membership, ads, and other trade solutions are working to enhance our business and improve the company's economic performance. This quarter, we expanded the capabilities of the American market platform to include Mexico and Canada, as we launched Walmart Billis in Canada. The membership was also a prominent point, with the growth of two Walmart Plus numbers and a strong growth of Samsung Club in the United States, China and Mexico.

We also enhanced our advertising efforts by hiring Faby. We believe that Faby expands our ability to help advertisers from all walks of life to reach customers through self-service tools with results-based measurement in relation to the real marketing behavior. With the partnership with Walmart Connect and Fizio, this increases the importance of our platform and creates value for customers, buyers, employers and advertisers. These are important elements because they prove the value that we create in all areas of the company.

Instead of building completely new capabilities, we have become able to build more and more in one time and continue to improve and expand globally. This makes us faster and more efficient, and allows customers to benefit from the investments that have been developed anywhere through Walmart. The fourth field is our supply chain. We have invested in the technology and capabilities of our financial network, and these investments in the customer experience show that they allow us to transfer the stock with greater efficiency, deliver faster, help in the stock levels, and support the growth and support the growth of our direct and market-based businesses. It also enhances the economic aspects of our multiple channels model. While we improve the density and benefit through our network, speed and profit increase with us.

You can see how you build these benefits together. When we invest in the supply chain, it helps us to deliver more products to our customers and members faster. When they get us on the elements faster, they trade with us more repeatedly, more, whether through the internet or in our stores. And with the increasing trend of marketing, our suppliers and sellers want to be closer to the point of purchase. It is a system that strengthens itself.

Finally, let me talk about how artificial intelligence helps in making Walmart faster and more suitable and personal. We continue to follow a path led by humans and supported by technology. We use artificial intelligence to make our work easier and help our employees grow and provide the best they have. We believe that AI will improve almost all of our work by making marketing better and our employees' work easier. Sparkey is a great example of this. The number of customers who use Sparky has risen by 70% from last year. Also, customers and members who use Sparky in marketing spend 40% more in one order than others. One of them recently shared that he asked for a weekly plan of healthy foods that contain and in a matter of seconds, Sparky shared recipes and recipes with the ability to add all the ingredients required to their salad in one copy.

Until Sparky learned about the ingredients that he bought recently through the Internet and in the store to avoid buying what they actually have. It builds confidence. When you look at the full picture, the most encouraging thing is the length of the links of these fields in an increasing way. The matter is not only about one engine, but about building a commercial work that enhances every feature that follows. However, I will conclude my comments from where I started, and it is thanks to our partners. The progress that we are making is possible thanks to their way of serving customers and members every day, and their way of adopting new technology and their communication to find better ways of working.

I am excited about the growth that we are enjoying and confident in the strategy that we are implementing and more optimistic about the future opportunities. And with this, I will move on to John David to show the details of the financial quarter in more detail.

John David I confirm John's feelings. We are happy with the way our work is going, especially in the context of the recent operation that has been in the hands of some of the global opposite winds in the near future. The model of our business is increasing in strength and stability. This gives us confidence to raise our directions for the growth of our sales and operating income for this year. With the adoption of the national drawings, there are some specialties in the results of this quarter. So, I will give a deeper look at the effects and discuss how we think about these factors during the second half of the year.

First, I will start with the most prominent financial and operating results. The growth of the company's net sales reached 5%, which is what came in the upper part of our guidelines, which ranged between 4% to 5%, driven by the growth in the e-commerce, and the Sam and China club. This quarter shows the benefits of our diverse portfolio of business through channels, patterns, and different markets. The net sales of global e-commerce are 23%, continuing the strong growth of the past several years. The US and our international sector contributed to the growth of the company's sales. The sales of Samiz came in at an increase of 7% in deals with strong growth in the size of the sales units.

The international sales increased with a stable currency of about 8%, leading to a growth of 9.7% in China. Walmart's sales rose by 3.5% in the United States, with an increase in sales compared to the oil price by 2.6%, which is a little less than our initial expectations due to the decrease in health and health sales that were affected by major obstacles as a result of the high-quality pricing policy. I will talk about this matter in more detail in a little while. The average operating income of the institution has risen by more than 17% based on the fixed currency, and the average profit has increased by more than 19%. This performance reflects the benefit of the recovery of the national income that we received, which was partially covered by investments in prices during the quarter, in addition to the improvement of the additional costs in our digital business thanks to the power of the high-cost trade.

The high-income income is guaranteed by a net profit of about 750 basic points related to the reduction of the GDP that was received in the second quarter. And by removing this benefit, the main income income was at the highest level of our directions, which was between 7% and 10%. Our expectations are that the priority is to continue to give to use the remaining capital to reduce the GDP in the second half to enhance the experience of customers and investments in prices. and and the third meaning of the basic growth of the company I would like to take this opportunity to further confirm the positive progress that we are making in our business in the field of electronic trade The digital side pays for our growth, and the spending of our customers and our market share in all operating sectors.

And with our spread of these digital capabilities outside the United States, it allows us to move quickly from an operational point of view And from a financial point of view, this allows us to grow with a less negative impact. Electronics trade in the United States has grown by 24% in the second quarter, with a growth of more than 40% in the delivery processes that are carried out by stores, and a growth of 20% in the average of two-week customers, and a growth of more than 50% in market sales. Electronics trade was also strong in Sam's Club in the United States, with a growth of The market has risen by 26%, and in our international sector by 19% with the leadership of China, India and Canada.

The continuous growth in electronic trade contributes to the growth of trade solutions. Advertising, the market, data and memberships projects. I will start with the global advertisements, which increased by 38% paid by another strong quarter of Walmart Concrete in the United States and Philips Car. Walmart's ads in the United States have also risen, with Physio being 38% paid by Walmart Conquit, which rose by 43%.

The market and implementation services have continued to rise during this quarter, with sales in the United States rising by 52%. It has passed almost 50% of market sales through Walmart's customer service in the second quarter, with an increase of almost 400 basic points compared to last year. We benefit from a wider range of business features that include more of the main trade signs that customers want. The WALMART data projects are continuing to push for a fast-growing trend. Users are being rewarded with enhanced decision-making capabilities on the platform, which has revealed common growth opportunities through the WALMART framework and markets. We announced today that we will expand the St. Taylor platform to include the Sums Club in the United States next year, in response to one of the most important requests from and the We are happy with the strong and consistent growth of two of the numbers in the US Walmart Plus program, which led to the best growth in organs in the first half of its history.

We build what we believe to be the most important organ program for consumers, and we are excited for what awaits us. The thing that people sometimes forget when thinking about our organ program is the additional increase that we see in the total value of GMV goods. The United States has a total value of GMV, which is almost four times the value of non-members.

Moving on to the additional benefits, our profit in the electronic trade has continued to improve. Our business in the electronic trade for Walmart in the United States has achieved additional profit benefits of two figures during the first half of the year. This was due to the continued power of the inheritance of ads and units and the increase in the expansion of our own distribution network and the growth of our fast distribution operations, which represented a record of 37% of the distribution operations that were carried out by the stores during the quarter.

Finally, the benefits of the completion. Now, 3,100 stores in the United States are being served at a certain level of the shipping. We are processing more than 50% of the volume of the electronic trade requests we have through our partners.

Now, I want to discuss some areas in more detail. The first is the sales of the comp stores of Walmart in the United States. To help understand the structure of our sales in the United States according to the category of goods, we presented an additional explanation in the presentation of our special completion sheets, which is the 14th line. The data shows in that slide the sales of Walmart stores in the United States, except for the health and health sector. Over the past two years and half of the past year, the sales in our main sectors were very consistent, with a ratio of mostly between 3 to 4 percent on the basis of quarter-year.

As for the exceptional periods such as the last quarter, looking at the middle of the two years, growth is in the middle of a similar range of 3 to 4 percent. We expect that the main sales will remain in the same range in the second half. And with that, looking at the overall sales of Walmart's main stores in the United States, including health and health during each financial year 25 and financial year 26, we achieved 100 main points as a positive payment of GLP-1 medicines with commercial signs. In the financial year 27, it is expected that the benefit of GLP-1 medicines will be around half of that amount, as the growth of medical recipes will have a greater negative impact due to the mixing of prices.

In the year of 2027, we pointed to a decrease of 100 main points in the total sales of the existing shops as a result of the reduction of prices and the transition from commercial signs to general medicines in the first year of the year to organize the maximum limit for the fair price. In the second quarter, this negative impact was close to 125 basic points, and we have updated our estimates for the financial year 2027 to become equivalent to 125 basic points. With all this in mind, we find that the sales of the main products were consistent. But on the overall level of the similar sales in the United States, we saw a change in the sales in about 200 main points in the growth of sales compared to the previous years, which is a completely related matter to the health and health sector.

It is important to note that this non-profit effect is limited to the overall wealth only. We are happy with the basic performance and contribution to the profits of our businesses in the health and welfare sector. After that, I want to discuss the similar sales inside the stores. They have decreased by a single percentage in the second quarter, which is what is in line with the direction that began in the last quarter of the fourth of last year. These opposite factors are pushed in the first place by the negative effect of health and welfare businesses, where the vast majority of sales are made inside the stores.

Our store's role has evolved with the change in the model of our work. The market is now more than 23% of our sales in Walmart, the United States, which is the level that it was only five years ago. As our focus increased towards the model of multiple channels, our stores increased. It is not less important, but more important. Between shopping inside the store and digital execution, we now have sizes and units that are done through our stores more than any time in the past, as they represent the execution the last quarter, 80% of the demand for e-commerce and 100% of our fast-trade operations. With the continuous improvement of the profits of e-commerce, we have become increasingly inclined towards channel dynamics with the ability of customers to trade according to their conditions.

After that, I want to discuss the adoption of digital graphics in more detail. As we shared with you in May, we were eligible to adopt about $ 2.9 billion in digital graphics, which is about half a percent of the annual sales in the United States. So far, we have received almost all the costs of the transfer of these commercial drawings. As John mentioned, we have taken a method to invest this money in the experience of customers and price management, with the priority of investing in the types of stocks and general goods. Looking to the future, our directions for the third quarter will reflect the continuous effects of the prices taken in the second quarter, to the side of continuing to give priority to investing in drawing and drawing expenses in reducing prices.

We look forward to the growth of our operating income for the second and third quarters to evaluate the main performance of the company. Now, I will move on to the sales, general and administrative costs. We have adjusted the cost of wages in the second quarter with our continuation in improving productivity through increasing the use of technical tools by employees in stores and simplifying storage flow thanks to the completion of supply chains. and the cost of the supply. And of these profits, the increase in the loss of capital and increased the cost of self-insurance. The stock price rose at the end of the quarter by 6% with the fixed currency, which is a little bit more than the overall growth of the institution's sales.

This increase reflects the increase in costs, in addition to increasing the stock price to support strategic initiatives in the United States, with the improvement of the stock price through implementation centers. By moving to the directions, we have increased confidence in long-term value movements for our business. Our business is strong. Electronics trade and business of connection are growing confidently. And we are achieving continuous positive profit.

We raise our sales directions for the financial year to 4% to 5% after it was 3.5% to 4.5% previously. There are four assumptions that deserve to be made. The first is that this sub-economic review reflects the performance of the first half, and it is also supposed to be better sales in the second half compared to our previous directions with the payment of prices for a fast and sustainable share of the market. Prices are an immediate benefit to customers, but it builds value over time for the company.

Second, we are making bigger consequences than the maximum limit for fair pricing in Walmart's business in the United States. Based on the experience of the year so far, we can now say that the consequences that will face Walmart's sales in the United States will be close to 125 basic points. After that, we expect that Sam's Club in the United States and international operations will be a motivator for the growth of the institution in each of the fourth and fourth quarters. It is expected that the growth of Walmart sales will improve in the United States in the third quarter with the investment in the value of the customer to stronger sales. And finally, the time will affect the big billion for the company to stop the growth of sales in the fourth quarter.

This year, we expect a decline in the third quarter to increase by 100 main points in the growth of sales compared to last year's event. We expect that the growth of the fourth quarter will benefit a similar amount to this year's event. In general, we expect that the growth of the fourth quarter will be between 3 and 3.75%.

Regarding the operating income, we raise our directions for the year by a total of 7 to 8.5% compared to 6 to 8% previously. We expect to contain the financial impact of the reduction of the nationality and the return of investment to a large extent during the current financial year with the aim of achieving sustainable benefits for customers and profits in the market share in the second half of the future years. Our directions assume that the cost of fuel will continue at the current rates. We now expect more than two billion dollars in additional costs related to fuel this year, above what was mentioned in our original directions. We also expect the cost of the acquisition of Vibe and its integration as a balance to reach about 20 basic points for the growth of operating income.

With the inclusion of the planned investment to return the national rates, it is expected that the operating income for the third quarter will grow on the basis of the fixed currency with a ratio of 2% to 4%. The indication is that a large part of the borrowed money was invested at the end of the second quarter, so the full effect of these investments appears clearly in the third quarter. When we look at the official operating income for the second and third quarters, we find that the growth average is about 10% for each quarter. We raise the profit-making directions for the year in full to range between $2.80 and $2.87, after it was previously ranging between $2.75 and $2.85.

As for the third quarter, we expect the profit-making direction to range between $62 and $64. I want to be very clear about this point. We are now in the middle of our financial year, and we are raising our financial goals for the year in full to rest our trust in our ability to maintain growth and maintain a market share. More importantly, we are raising this in the face of additional costs exceeding billions of dollars related to the rise in fuel prices and a consumer environment that may be more vulnerable than it was in February when we presented our initial expectations. Based on this, we see that it is wise to be careful by raising the goals in a modest manner only.

We expect a low rise in capital inflows this year to reach about 4% of the annual sales year. Even with this increase, we expect growth to grow by two in this year's free cash flow. In conclusion, our focus team continues to focus on what we are doing, which is serving customers and members with a great daily value, exceptional comfort, and speed in performance. All this with the aim of advancing the development of our business model and diversifying our Thank you.

Okay, thank you for this question. I'm with you, John. Let me start by saying that I'm happy with the performance of this quarter for Walmart. This is a good quarter of a year in which we achieved strong sales and growth in operating income. We have invested, as you know, in the past few years in a strategy to enhance our comprehensive business. And we are proud of this progress. I was part of this strategy for a year and it's a great vision that's being realized on the ground. We're trying to be as hardworking as possible with our employees, whether they're shopping from the store or the car or by taking them to their homes. Our employees are looking for value and our team is doing that well.

It was a great quarter in Walmart, the United States, and on the international level, and in Sam's Club. As a result, we witnessed profits in the market and we're happy with these profits in all aspects of our work. There was an impact in the markets we talked about related to MFP. And despite that, the second quarter, sorry, for Lam and Walmart, the United States is the best quarter we have seen in the past three years. So we are proud of this performance. And with the completion of all these parts, such as the market, the ads and the organic business, it is important to note that these businesses work together and support each other, and strengthen our ability to serve customers with a special value.

As for the price specifically, as John David mentioned, we invested in prices during the second quarter. We talked at the end of the first quarter about the fact that customers feel some pressure. So we are proud of our investments. We were very careful about those investments and the categories that targeted them. And the timing of its implementation. And we will manage it through the quarter. Our merchants have a great experience in providing value and achieving balance. And they do it in a way. As you said, to profits in the market. We are really happy with the profits of the market that we witnessed in the food category. And this type of profit of the market leads to being sustainable over time.

And looking to the future, if we put the two quarters together, we are satisfied with our expectations regarding the sales and growth of the operating income. You have heard John David mention what these two things are. Our goal and our constant message is to provide money for people to live a better life. And this is what we will continue to focus on and we will make the least of our effort to keep the lowest possible prices for our customers throughout the remaining period of the year Thank you. Welcome.

With you, John David. Thank you for your question. No doubt. And it is obvious that we have seen some increased pressure on the consumer compared to the beginning of the year due to the rise in fuel prices. When we export the last quarter month by month, you can notice when the fuel prices have risen and exceeded four dollars, and there may be a psychological impact on the choices that consumers take. So, June was more clear when looking at the quarter in terms of the restrictions that customers are doing, and for this reason we relied greatly on low prices.

You are right. There is flexibility in this commodity that we are offering. We talked about 11,000 low prices. We are very proud of that and how we helped support our customers and members during this period. But I think the very important point in your question is that there is a temporary delay in that. There is a kind of cumulative benefit that is achieved when the prices drop, so you do not expect to necessarily get a compensation in return for those prices that have dropped in the immediate period. And as you know, because of your work, we do not run our business for one quarter only. We run our business on the basis of multiple years to play for victory.

We feel confident in our strategy and in what we do here. And more importantly, the profits of the market share that we have seen in recent periods are sustainable profits. We see that we keep those profits in the market share. And this is the reason that made us, perhaps, eager to continue the effort to achieve this. And the same applies to the decreases in prices and other investments. We have completed the first quarter, as we mentioned before, with about 7,000 decreases. It is usually a number of about 5,000, but at the end of the quarter we reached 11,000. and when you reduce prices in consumer goods such as food, you are looking at an increase in the first sales units.

We have seen growth in trades and units during this quarter, which creates a temporary effect on the price drop. But with the growth of units over time, especially in food materials, the market share is showing. We were happy to report the last market share in the food sector, as it was one of the strongest reports we have received in a while. So we are happy with these results, but once again, we will deal with this matter with all our heart. Our hope and intention is always to reduce prices constantly as long as possible. We have a clear vision of these things. And for any of them, we see that we do not get a profit from them, so we will manage them with care.

We want to be learning how to invest all our money and all the available money. In the end, we are trying to enhance the model of daily low prices and providing money to customers.

The assumption we have regarding the rates of the nationalities is essentially at the level we witness today, and the same applies to the prices of fuel as well. Therefore, if there is an improvement in fuel prices, I think that will be beneficial to our expectations. In relation to the operating income for the year 2027 and the following years, look, we have a lot of confidence in our ability to continue to develop the profit class at a much faster rate than the growth of the interest rate. But I don't want to ignore the growth of the interest rate either. To have a base of interest that is worth about 3.4 trillion dollars and is able to grow by 4 or 5 or 6 percent annually, this is a great growth.

What is different in a noticeable way, however, is the profit margin of this growth. So, let's take a step back and think about the growth of sales in the United States. The growth of sales in the United States is 2.5%. I think the correct way to think about it is that it is actually closer to 3.5% when it comes to health and health care, but let's take it by its name at 2.5% for sales compared. We have increased the operating income by 10% except for the general definitions, and this equals four times the level of wealth growth. We did not achieve this level of profit growth compared to the growth of sales in the United States since two decades.

Our business is changing radically. If you look at the profit engines in our work, you will find that half of the growth came from areas such as the organization, the ads, and the market. And we expect this to continue. In fact, I think there are clear indications of improvement in the added profit margins with our past. In the current time, we are achieving additional profits for two low-income, but growth engines for our business are still strong as they always were.

Hello Brad, as we mentioned, there was a certain impact, and in the previous years it was a payback, but it was a struggle in this quarter. This is in the 14th line in the supplementary materials. So we need to provide the possible transparency, but we do not want to point out that we are not happy with health and welfare works. The low prices help the long term. We have a history of low prices in pharmacies that go back to the medicine of the pregnancy for 4 dollars, which is a fascinating thing. But I want to talk to Dave about the business in general. We are excited not only for the basic performance of health and wellness, but because health and wellness customers and pharmacy customers spend more.

And I think there are important details that Dave will add.

Certainly, John. We feel very comfortable in the main income in health and wellness businesses. The medical specifications continue to grow. We earn a healthy share, and the clients respond with the power of the relief that we build around the pharmacy. I really want to highlight that the group of health and wellness clients is very important to us. When a person becomes a health and wellness customer, he spends on average three times the amount of money a Walmart customer spends.

And when they start using the medicine delivery service in addition to being health and wellness customers, that doubles again almost. Therefore, we have a unique opportunity to connect our experience in the pharmacy, our digital capabilities, and our local online service network to make health care more comfortable and easy to access, with our deep relationship with these clients.

Welcome Michael, good morning. First, the daily low prices are a philosophy of trust with customers, and we are proud to provide a value for a supply chain that can be predicted. It is consistent with the passage of time. So, when we have the opportunity to lower prices, of course, this will always be our goal to do so. But we always need to balance our investments in prices with what we see in the market and the commitments that we have cut in our expectations, as well as the time-span of the operation. So, we will continue to work on that. I think it is also important to think a little bit and think about the model of the work as a whole.

John David mentioned the growth in fields such as membership, ads, data and service. We have built a more sustainable and smooth model that gives us better choices over time. We are proud of the surprises of our prices. And of course, we will defend it. We are proud of the number of decreases we have. The number of decreases has started, as we mentioned, in the late July. July was stronger than June. We are happy with the way I started the season of returning to schools and returning to universities. So we will watch over time. We have a great business team that will of course diversify the groups. And we will study these investments with one and the other.

In the end, what we want to do is similar to what Dave said in the pharmacy. We want to be a commercial business that can rely on it whether you are shopping from the store or from the car or from the house. And we want to provide the greatest amount of flexibility for our customers. Thank you. Thank you.

I think it's a big part of our story. We continue to see these areas of growth in our work, which contribute to achieving more profits for the final results. We did not really commit to any specific number about the additional benefits in our work. But if you look at the past four or six months, almost, the additional electronic trade benefits in the United States were generally ranging from a high ratio of one to a low ratio of two. Since I was 40, I was asked a question about my chance to improve over time, and I think I was more conservative at that time. But when we see activities such as our advertising activities continue to grow by 40% on a much larger base, that gives us confidence in the possibility of seeing the additional barriers rising more.

And what should you believe in to raise the additional barriers? Well, the growth of our electronic trade must exceed the growth of the advertising models. and this is what we are witnessing in reality right now, not with a simple difference, but with a big difference on a wider basis. And with the acquisition of FAY, we have a new market that we can target that was not available to us before, which is represented by these small and medium-sized traders. So we are very excited for the opportunity available there. However, advertisements are only one side of what we do. I do not want to refer only to that as a single opportunity we have while we continue to add business that completes the portfolio of diverse offers that we own today and that generate these higher incentives.

It is a great thing for us. The main advantage of digital growth is the ability to grow at a low cost. As you know, John talked a lot since he joined us about the platform that we follow. We do all the same things that we do in the United States and in our other markets around the world. Mexico is a good example, really. We look at Mexico today, which is the same work plan that we applied in the United States five years ago. And we are excited to some of the early progress that we see there. So, we think we have a great opportunity to continue changing and the vision of our profit prospects is rising over time.

The last thing I will say about this topic, it is clear that I have some passion for this point, but not only our profitable prospects grow, but it grows by the weakness of the overall working average. I think this kind of explains how the nature of our profits and the continuity of growth that we achieve in the future will affect. So, we are very excited about that.

Chris, let me start and then maybe I'll hand it over to Dave to give more details. I think that the first quarter benefited from the incentives related to tax evasion. We agreed on that in the last call. It is difficult to determine the amount of what is attributed to what happens in your work in comparison to the overall environment, but I think we benefited from that. from that. And with our second quarter, we witnessed the rise in gas prices at levels higher than we saw in the first quarter. I think all of this affects the results, but as you know, when you look again at the core of the work and the fact that the value is in our opinion, strong as it always was.

We feel a great satisfaction towards our performance and our future expectations. As for returning to schools and universities, the return to schools has been delayed in most parts of the country for about a week this year. Therefore, ربما لا يزال الوقت مبكرا لاستخلاص اي نتائجة لكنني اقول ان العودة الى الجامعات صارت بشكل جيد للغاية نحن سعداء حقا بما نراه في هذا الجانب لقد سألت عن فئات البضائع العامة على سبيل المثال من بين العلامات التجارية التي نبيعها حاليا هناك علامتنا الخاصة للاطفال واندرنيشن انها العلامة التجارية الاكبر لازياء الاطفال في الولايات المتحدة اليوم لذا نحن فخورون جدا بما نقدمه We are aware that the profits of the market share that we achieve, especially those of high-income consumers, partially return to the formation that we provide.

And that was part of the reason for our high stock. It is true that we have more commercial signs and more expensive goods that attract a wider range of customers that affect our business and our results.

Dave Yes, John David.

I would like to add that we are very happy with the progress of the team in the general goods sector. We see strength in the style, strength in the direction of the direction, and strength in the sports and games. In the field of sports, I am very excited about some of our special commercial signs, such as Scoop and Free Assembly. We witness a growth in sales compared to a fraction of three figures in those fields. and in relation to returning to universities, the records on the rest of our home products especially those the university From the new areas of the school the shoes the carpets and the carpets They have all been registered as growing in sales compared to a ratio of two and three numbers As for returning to schools, as John David mentioned, this is the area we are involved in.

Walmart sells almost 50% of the total of school supplies in the sector in terms of the number of units during the season. We are very happy with our position at this stage of the year. The customers interact positively with our great investments in prices. We have a list that includes 14 main goods that sell at prices less than they did in 2019.

A great example of this is the color pen between Anadjir, 25 cent or the pen of the bullet, between Anadjir, 2, 92 cent. These prices are a shock to customers, and we see this in the growth of the movement of visitors and the average value of the bill and the size of the units sold.

Christina, throughout the year, we have stated that our intention is to invest in prices where that is possible. and any savings we had, we would give priority to their investment in prices. And this is what we did during the quarter. Facts like the meat section, for example. The prices were high, and we know that customers need to reduce the costs. So we invested in minced meat and other areas that were very important to customers. We will monitor these things over time. Every decrease in prices has a start and end date. We will monitor the movement of the selling units. We will study the impact on the whole group. And the most important thing is that the result is that we witness profits in the market share.

And the profits of the market share is ultimately the way we judge our performance compared to other companies in the market. In terms of quantity, I don't know if it is the highest at all, but it is a high number. It is the highest that I remember at least in the last quarter. And it is a reflection of the work that the merchants did. It is a reflection of our position in the market. And a reflection of the money that was available to us to invest in prices. The time of these declines was at the end of July. And it will continue in the second quarter. and for this reason, John David said in a previous time that we should look at the 42nd and the 3rd meaning in terms of the growth of the sales and the growth of the operating.

And we will measure that appropriately. We do not invest just for investment. We do this because we believe that it has a sustainable and long-term effect on the way that the customers look at us. And what we try to achieve at the end of the day through the daily low prices and decreases is to increase trust. From the past, for a while, we have determined the number of these decreases that will always be. We will continue to do this and work with our suppliers to determine where this is possible.

Bob, in general, we have seen a low inflation environment for a long time. We are between 1% and 2% in total, and we believe that price drops can help during this quarter and the past few months. Therefore, there are no major fears at the moment about inflation in general. Perhaps fuel costs are the only thing we are naturally watching because of the size of its impact. to reduce these costs over time.

As for the stock, it is a matter we watch with great care. I was in the company for more than 33 years. I was a merchant and an employee. And it can affect the stock on many things, starting from sales to decreases and cash flow, as you learned. When you take a step back and look at the categories, and I will talk about Walmart, the United States, for a moment, because it represents most of our stock. The goods are in good condition. We have an increase of between 1 and 4. We have some investments for expansion. The cost of fuel is a little higher, so it led to a huge increase. We have some manufacturing in the warehouse, but when I look at the categories, most of them range between one and four.

The only thing that falls within that upper limit is the consumables, which is the speed of movement. So, we are here today, I have no big fears about the warehouse. In fact, there were a few categories in June and July, I think, where we had a slight shortage in the warehouse. We will handle that and we will react in a suitable way based on what we see from the clients.

As you have heard from Dave previously, we think about decor and decorating the living room, then there are school tools and school lunches. So you will see that in all corners of the store. We feel very pleased with the guideboards in the store, and the stores do a very good job in putting those boards. And on our main page, you will see at the top left, one of the first shelves there at the top is more discounts.

It is always present. So we will continue to deliver value in any way possible. We are proud of these reductions, which are useful for customers with our entry in the second half of the year.

Certainly. Let me answer the first part related to the formation of comparative sales. It was a positive and wonderful vision that we achieved growth in transactions during the quarter. This applies to Walmart. and on Sam's Club, as it applies to our international operations. Therefore, we see growth in the reception of customers around the world. We have also achieved positive growth in the number of sales units, and these two things mean what we discuss weekly. We start every other day around the world in different markets with what we call a trade meeting, where we talk about customer impressions, and how many of them we have been able to serve, and the new customers we have hired, and the growth of units.

Therefore, we monitor both cases. When you invest in certain groups, as we did through all strategic business units, The market is growing faster in the sale of products such as general goods in terms of the financial value, as well as food and consumer goods. When prices drop, they become less than they used to be, and growth is noticeable in the number of units, and after a few weeks or months, you start to see a more lasting impact in the food and consumer goods sector. The traders do not necessarily buy more food just to see lower prices, but we strive with the passage of time through decreases and lower prices to build trust with customers. We want to trust our customers with our low prices on the stock market and to deliver it to them in the way they prefer, whether in the car or at the store or in their homes.

Agel, Boul, regarding the sales, general and administrative costs, let me answer that in two points. One of the main factors was destruction. Destruction is related to the capital inflows that we spent, which focused mainly on the completion of the supply chain and processing the connection speed. We are very pleased with the results we see. In the current quarter, the number of units that we have delivered in less than 30 minutes compared to last year has doubled. 70% of all electronic trade requests are delivered on the same day or faster. This was not achieved without the investments we made. So we are happy to that extent. We have faced some pressure in what we call self-sufficiency funds.

The two other groups I put in this section are the requests, as you asked, and also the collective health insurance. And if you look at the first half of the year, about a third of the increase comes from health insurance. And what happens here is that the number of employees' rounds has decreased significantly in some cases. By the way, this is a very good thing for our work. We want our employees to have more experience and long service serving our employees and members. But with the decrease in the number of employees' rounds, the number of members in that plan has increased. So, looking at the size of our company, we have witnessed a little pressure there.

The last thing I will say is that you are from one quarter to another. Sometimes you tend to increase investments in work a little. And although I did not mention that in the prepared notes, I think that this quarter is within this category, as we felt that it was wise to make some of these investments that we hope will benefit the second half of the year.

Okay.

Yes, we are seeing wide-ranging profits in the market share through many categories. Our strategy is successful, and thus we are earning a larger share. In the retail sector, sales increased by a average of 100% from one share with strong growth in units and continued to achieve profits in the market share as mentioned. The fields that I would like to shed light on in this work.

First, we used some of the investments and discounts that we got to invest in the barbecue basket this summer, which fed eight people with less than $40, with a price of 13 types, less than last year, with a percentage of 16%. We also offer amazing quality with a great value through our trade mark, which has now become a trade mark of a billion dollars for us. And for returning to schools, we also include food in this side, with the basket a new lunch box for returning to schools that contains 10 meals of a rich lunch box with a price of less than $2 for the meal. So, this is just an example of a space in which we earn a visit, and we earn a larger bill, and the numbers of units increase in it, and these investments are what pay this high.

Thank you.

I would like to thank our colleagues for the work that they have accomplished in this quarter and what they offer our clients daily. And I would like to thank you for your time and your interest in the company. I will conclude my speech with what I started. This quarter was a new one for Walmart. Sales reached more than 5%. And the employment income increased by 74% without calculating the benefits of the benefits. It was another strong quarter. I feel very comfortable towards our current situation. We have invested in a strategy that offers a model of work that is comprehensive through various markets. I am really excited about the expansion of the platforms in international business.

There is a lot of a lot of things that we can do now and we were not able to do in the past years. Another strong quarter in e-commerce. Another strong quarter in the market platform. Advertising. We see more and more people choosing Walmart Palace and it is exciting to see Walmart Palace in Canada at all times. So, over time, I became more optimistic than any time in the work model, and I look forward to seeing all the parts that complement our progress. Thank you again for your time and your interest in Walmart.