Walmart Sees Second-Quarter Sales Soar: Live Updates
Walmart Sees Second-Quarter Sales Soar: Live Updates
In a sign that the airline recovery will be long and painful, Boeing’s chief executive said on Monday that the company would offer a second round of buyouts, adding to the 10 percent cut the company announced in April.
“I truly wish the current market demand could support the size of our work force,” the chief executive, Dave Calhoun, said in a memo to staff. “Unfortunately, layoffs are a hard but necessary step to align to our new reality, preserve liquidity and position ourselves for the eventual return to growth.”
Mr. Calhoun did not specify how many jobs Boeing was hoping to cut. The new buyouts will help limit involuntary layoffs and will be offered to employees who work in parts of the company most affected by the pandemic, like Boeing’s commercial airplane and services businesses. Fewer employees who work on Boeing’s defense, space and government services businesses will be eligible, Mr. Calhoun said.
While recent federal data shows air travel is recovering again after stalling in July, the number of people flying each day is still less than a third of what it was a year ago. Industry executives expect that figure to remain depressed until a coronavirus vaccine is widely available.
Walmart’s business continued to boom in the second quarter, as sales rose 9.3 percent, driven by continuing strong demand for food and general merchandise during the pandemic and huge growth in its e-commerce business.
The company said Tuesday that its revenues were up 5.6 percent to $137.7 billion from a year ago, while e-commerce sales grew 97 percent, more than double what the company had been averaging in recent years.
Despite rising costs related to the pandemic, Walmart, the nation’s largest retailer, also managed to generate larger-than-expected profit. It earned $1.56 per share, far exceeding the $1.25 that Wall Street analysts had predicted.
Walmart’s strong results, which sent the company’s stock up 2 percent in premarket trading Tuesday, reflect how a few large retailers have been able to capitalize on the surge in demand for food and necessary items by Americans hunkered down at home. Walmart’s success, while many other retailers have struggled or failed in recent months, shows the consolidation in the retail industry has been compounded by the pandemic.
The company noted that stimulus money helped boost sales of general merchandise, making it uncertain if Walmart and other large retailers will be able to keep up the sales growth in the coming months if policymakers do not restore the benefits that expired at the end of July.
In a statement Tuesday morning, Walmart’s chief executive, Doug McMillon, thanked the company’s employees “for their tireless efforts during these unprecedented times,’’ adding that “we also appreciate the trust and confidence of our customers.”
Home Depot’s same-store sales soared more than 23 percent in the quarter from May to July, as Americans across the country tackled home improvement projects while housebound during the coronavirus pandemic.
The company also saw an increase in profits, earning $4.3 billion in the second quarter compared with $3.5 billion during the same period last year.
“The investments we have made across the business have significantly increased our agility, allowing us to respond quickly to changes while continuing to promote a safe operating environment,” said Home Depot’s chief executive, Craig Menear, in a statement.
The company invested approximately $480 million in additional benefits for employees during the second quarter, including weekly bonuses for hourly workers in stores and distribution centers. The company has spent $1.3 billion on enhanced pay and benefits so far this year, it reported.
“I want to thank our associates for their continued focus on serving our customers and communities as we navigate these extraordinary circumstances together,” Mr. Menear said.
Wall Street continued its dance with a record on Tuesday, as traders took stock of a spate of earnings reports from large American retailers and the latest escalation in trade tensions between the United States and China.
The S&P 500 was unchanged, after giving up an early gain, while stocks in Europe also wavered.
Wall Street’s benchmark has hovered just below its February closing high of 3386.15 for nearly a week. It crossed above that level in early trading on Tuesday before falling back.
Even without the record in hand, Wall Street has been on a remarkable run since late March. The S&P 500 has climbed about 50 percent from its lowest point, after having crashed as the coronavirus pandemic froze economic activity around the world.
The rally has come despite a number of obstacles: warnings about the long-term economic damage caused by permanent business closures and layoffs, still rising tension with China and the inability of lawmakers in Washington to agree on another aid package for millions of unemployed Americans.
In part, the gains came as economic data and corporate earnings reports showed that an economic recovery was already underway. On Tuesday, Walmart and Home Depot reported strong results for the second quarter. And data released last week showed that even as coronavirus infections continued to spread, Americans kept shopping in July with retail sales rising 1.2 percent from June.
Also on Tuesday, the Commerce Department reported that construction of new homes in the United States surged nearly 23 percent in July, to the highest annual pace since February.
Still, there were reasons for traders to hold back on Tuesday.
The Trump administration said Monday that it would restrict the ability of the Chinese tech giant Huawei to buy a wider array of chips made or designed with American equipment and software. It marks a tightening of rules first announced in May, applying them to more semiconductors, covering any chips made abroad with American equipment.
In a reminder of the cost of the deep global recession, Norway’s sovereign wealth fund, the world’s largest with more than $1 trillion in assets, reported that it lost more than $21 billion in the first half of the year as stocks and real estate holdings tumbled in value. The decline followed profits of $180 billion last year.
The fund’s deputy chief executive, speaking at a news conference, said the coronavirus’s spread continued to pose a risk to financial markets. “The main thing is the pandemic. It is still a global pandemic. It does not seem to be under control in any shape or form,” said the executive, Trond Grande, Reuters reported.
Mario Draghi, the former president of the European Central Bank, warned Tuesday that the pandemic “threatens to undermine the fabric of our society as we know it,” with a particularly devastating impact on young people whose ability to acquire skills and experience has been derailed.
Mr. Draghi, 72, who had been keeping a low profile since his term as the central bank’s president ended last year, called for more investment in education to compensate for the disruption the pandemic has caused for schools and universities.
Otherwise, he told an audience in Rimini, Italy, young people “will be left with a lack of professional qualifications and experience, compromising both their freedom of choice and their earning potential later in life.”
“The debt created by the pandemic is unprecedented and will have to be repaid mainly by those who are young today,” Mr. Draghi said. “It is therefore our duty to equip them with the means to service that debt, and to do so while living in improved societies.”
Marks & Spencer, the British department store and food retailer, announced plans on Tuesday to cut 7,000 jobs in the next three months, or nearly 10 percent of its work force. The staff reductions will be in stores, its central office and across regional management.
The pandemic has dealt a deep blow to many of Britain’s most well-known retail brands, including Boots, John Lewis and Debenhams, which have also announced thousands of layoffs and store closures in recent weeks.
Just four weeks ago, M & S said it expected to cut 950 jobs. The acceleration and expansion of its restructuring plans comes as many retail areas have struggled to attract shoppers even as social-distancing measures have eased in Britain. According to Springboard data on retail activity, foot traffic on high streets and shopping centers is still down by more than a third compared to last year. Central London and other regional cities also have far fewer shoppers than market towns or suburban locations.
In a trading update on Tuesday, the Marks and Spencer Group said food sales over the last three-month period were up 2.5 percent compared with the same period last year, while clothing and home sales were down 38.5 percent. Overall revenue for the whole company was still lower than last year, even though online sales had risen by more than 40 percent.
Despite being an iconic British retailer, M & S has been struggling for years. In 2018, the company said it planned to close 100 stores by 2022. It has spent the past few years moving away from clothing and home goods and promoting its food business, while also trying to get more of its products online. The company’s share price has dropped 78 percent in the past five years.
With more than 400 shops, the Singapore Changi Airport would be the fourth-largest mall by the number of tenants if it were in the United States.
The combination of an often affluent and captive audience has made airport commercial square footage some of the most lucrative in the world. But the pandemic has crushed the commercial calculus at airports, and no one is sure what comes next.
The leading airport for concession and retail sales in the United States is Los Angeles International, with revenue of $3,036 a square foot, according to a 2018 report from Airport Experience News. By comparison, the average mall retailer is around $325 per square foot, according to 2017 data from CoStar.
But that’s all gone now, said Alan Gluck, a senior aviation consultant at ICF. “In general, sales are in the toilet,” he said.
The very amenities that once made airports a standout for profit are the same things that are proving to be challenging.
So far, the pandemic has not paused terminals planned or in progress in the United States. Projects already underway, including at La Guardia Airport in New York and in smaller markets like Lafayette, La., are moving ahead, but taking a wait-and-see approach on adjustments.
New terminal construction should focus on space not just for the coronavirus but other respiratory illnesses, said Dr. Anthony S. Fauci, the director of the National Institute of Allergy and Infectious Diseases.
New terminals needed to allow enough space for people to spread out, offer high-efficiency particulate air filtration and distribute free masks. He would also like to see more health screening at airports.
“You can’t throw up your hands and say it is impossible,” Dr. Fauci said.
Uber and Lyft, which are facing mounting pressure to classify their freelance drivers as full-time employees in California, are considering licensing their brands to operators of vehicle fleets in California, according to three people with knowledge of the plans. The change would resemble an independently operated franchise, allowing Uber and Lyft to keep an arms-length association with drivers so that the companies would not need to employ them and pay their benefits.
The stock trading app Robinhood has raised another $200 million in funding, the company said on Monday, bringing its funding total to $800 million in recent months, and more than $1 billion since it was founded seven years ago. The new round of funding, led by the hedge fund D1 Capital Partners, values the start-up at $11.2 billion.