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Walmart's earnings surge in Q2 driven by strong online sales, Kohl's shares fall despite earnings beat

Yahoo Finance's Adam Shapiro and Julie Hyman break down second quarter earnings reports from Walmart, Kohl's, and Home Depot.

Video Transcript

ADAM SHAPIRO: But let's talk about those big earnings that we saw earlier this morning. First, there was Walmart. Total revenue was $137.7 billion. That's an increase of more than $7 million, roughly 5.6%. Now, there were some currency headwinds. And if you excluded those, revenue would have increased 7.5% to $140.2 billion.

Walmart reported that e-commerce sales in the United States grew 97%. Obviously, the pandemic having an impact. Walmart's comparable sales increased 9.3% there. Adjusted earnings per share $1.56, beat estimates.

JULIE HYMAN: I'm watching Kohl's here, Adam. Those shares are down 17% right now, even though on the face of it, a lot of the earnings numbers look pretty decent. Digital sales were a source of strength, just like at Walmart. They were up by 58%. And the online business at Kohl's now makes up 41% of its sales, at least during the quarter. That figure was half that a year earlier. Overall, revenue did fall by 23%, but that was better than analysts had been estimated.

A couple of things might be responsible for that stock drop. First of all, the CEO Michelle Gass said they expected the crisis to continue to affect the business and that the back-to-school business had started soft. Also their gross profit margin fell to 33.1%-- that's 5% percentage points more than that-- because of higher shipping costs and more promotions.

ADAM SHAPIRO: And then there's Home Depot. Home Depot reported sales of $38.1 billion in the second quarter-- the fiscal quarter, 2020 for them. That's a 23.4% increase from the same quarter year over year. Comparable sales for the second quarter 2020 up 23.4%. Net earnings, $853 million more than they were in 2019, gained 4.3 billion.

The company also, by the way, says that it invested roughly $480 million in additional benefits for associates. That includes weekly bonuses for the hourly associates in stores and distribution centers. Year to date, the company has spent approximately $1.3 billion on what they're calling enhanced pay and benefits as part of their response to COVID-19.