Walmart’s (WMT) Q2 results confirmed its ability to perform well across various economic conditions by taking advantage of special events, UBS said in a note emailed Friday.
July was a tough month for retailers, but Walmart saw strong sales during Independence Day holiday and a good response to the start of back-to-school season.
The company saw a 26% increase in overall advertising revenue, primarily driven by a 30% rise in the US Connect segment. The company’s global e-commerce segment had a 21% growth, the investment firm said.
Walmart’s cost of delivery fell by 40% year over year, attributed to improved density and a rise in fees for expedited shipping options, UBS analysts noted.
Walmart’s outlook for Q3 includes a modest increase in sales, with expectations of continued momentum in back-to-school sales and a conservative H2 guidance for operating income growth of 4% to 5%.
UBS retained the buy rating for Walmart and raised the price target to $81 from $74.