The retail giant's Q2 ecommerce revenue grows 6% year over year. But online sales are up 103% over two years, thanks to a pandemic-fueled surge in 2020.

Walmart Inc. reported modest growth in online sales in the second quarter of fiscal 2022—which ended July 31, 2021—compared with the year-earlier quarter in which ecommerce revenue soared.

Walmart (No. 3 in the 2021 Digital Commerce 360 Top 1000) reported U.S. ecommerce sales grew 6% year-over-year in Q2. But on a two-year “stacked” basis, which combines the quarterly growth for the past two years, online sales grew 103% compared with its fiscal Q2 2020, which was prior to the coronavirus pandemic.

“Customer behaviors changed during the quarter as people were shopping with us more in stores than online,” CEO Doug McMillon said during an Aug. 17 conference call with analysts transcribed by Seeking Alpha. Walmart gained market share in the grocery market, McMillon said without offering specifics.

Walmart reported its global ecommerce sales were on track to reach $75 billion by the end of the year. Walmart did not break out ecommerce sales for Q2. Still, in a Tuesday conference call with analysts, McMillon said the net penetration for ecommerce in Q2 was about 19%.

In an Aug. 17 note to investors, Morningstar equity analyst Zain Akbari said he expects Walmart to derive around 30% of its U.S. sales from ecommerce by the end of the next 10 years—up from a mid-teens percentage the firm expects during this fiscal year.

Walmart’s advertising business soars

Walmart’s advertising revenue is growing as well, McMillon said.

“Our advertising business in the U.S., Walmart Connect, nearly doubled during the quarter versus last year with active advertisers up more than 170%. And this isn’t confined to the U.S. we’re growing ad businesses in Mexico, India, Canada, and most recently in Chile,” McMillon said.

Walmart Connect, formerly called Walmart Media Group, offers marketplace sellers and brands opportunities to buy visibility on For example, advertisers can buy search ads or various kinds of premium placements on the site.


Morningstar’s Akbari said Walmart “is still in the earlier stages of capitalizing on its ancillary online revenue potential. We suspect advertising, analytics, and other revenue sources will help offset fulfillment costs as digital sales rise.”

Walmart has been spreading its wings as a business-to-business service provider in other ways as well. In late July, Walmart said it would begin offering several of its own technologies and capabilities to other businesses and brands. As part of this effort, Walmart also announced a strategic partnership with technology vendor Adobe to integrate Walmart’s Marketplace, online and in-store fulfillment and pickup technologies with the Adobe Commerce ecommerce platform.

During the conference call, McMillon added that revenue from fulfillment services for marketplace sellers also continues to grow but was not specific.

Walmart boosts its full-year outlook

Walmart boosted its full-year outlook for Walmart U.S.-store comparable sales to as much as 6% from a previous expectation in the low single-digits. The company now expects consolidated net sales to be slightly positive for the full year in constant currency, up from an earlier expectation of a low-single-digit decline. Walmart also adjusted its projections for operating income and earnings per share.


“We feel pretty good about the back half,” said Brett Biggs, Walmart’s chief financial officer, in an interview with Bloomberg News. “That’s influenced by a good start to the year and a good start to the quarter and back-to-school. We’re optimistic.”

During the Aug. 17 conference call, Biggs acknowledged that out-of-stocks in specific general merchandise categories are running above normal. He said out-of-stocks are due to strong sales and supply constraints but did not provide specifics.

The retailer also says it continues to see strength in the U.S. economy and expects “no significant additional government stimulus for the remainder of the year.”


Among the stimulus payments are the child tax credits that some 36 million U.S. families are now eligible to receive. The grocery industry could get as much as an $8 billion lift from such payments in the second half, Cowen analyst Oliver Chen estimated in an Aug. 10 note to investors.

In an Aug. 17 note to investors issued after Walmart’s earnings announcement, Brian Yarbrough, senior analyst for equity research at investment firm Edward Jones, agreed that Walmart continues to benefit from federal stimulus money and the effects of the pandemic.

“We believe the results were strong, as sales and earnings were well ahead of expectations, with a large raise in full-year earnings guidance,” Yarbrough wrote. “We believe sales were strong because the company is benefiting from consumers consolidating shopping trips, spending child tax-credit checks, and shifting toward outdoors and cooking at home.”

For the three months ended July 31, 2021, Walmart reported:

  • U.S. ecommerce sales grew 6% year over year and 103% compared to the same period two years ago, before the coronavirus pandemic.
  • Net revenue of $141.05 billion, up 2.4% compared with $137.74 billion for the comparable period a year earlier.
  • Consolidated net income of $4.28 billion, down 34.0% from $6.48 billion a year earlier.
  • U.S. operating income increased to $6.09 billion, up 20.4% from $5.06 billion a year earlier.
  • Consolidated operating income was $7.35 billion, an increase of 21.4% compared with $6.06 billion a year earlier.
  • International net sales were $23.04 billion, a decrease of $4.10 billion, or 15.2%, from $27.17 billion a year earlier. Divestitures negatively affected international net sales by $8.9 billion. Changes in currency exchange rates positively affected net sales by approximately $2.4 billion.

For the six months ended July 31, 2021, Walmart reported:

  • Net revenue was $279.36 billion, up 2.6% compared with $272.36 billion for the comparable period a year earlier.
  • Consolidated net income was $7.01 billion, down 33.1% from $10.47 billion a year earlier.
  • U.S. operating income increased to $11.54 billion, up 23.3% from $9.36 billion a year earlier.
  • Consolidated operating income was $14.26 billion, an increase of 26.4% compared with $11.28 billion a year earlier.

Percentage changes may not align exactly with dollar figures due to rounding.

Bloomberg News contributed to this report.