Walmart requires vaccines, doubles cash incentive for all US associates

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Walmart CEO Doug McMillon revealed that all of the retailer's U.S. employees above store and club level will be required to be fully vaccinated by Oct. 4 in an effort to mitigate the spread of the delta variant. 

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"Since the pandemic began, we’ve been clear that our priority is the safety of our associates and those who shop with us," McMillon told analysts on the company's second quarter earnings call Tuesday. "We think it’s important that as many people in the U.S. get vaccinated as soon as possible and vaccines be made widely available around the world." 

In addition, the United States' largest private employer will double its cash incentive for hourly associates across the nation to $150. 

"We’re grateful to those associates that are already vaccinated," McMillon added.

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Walmart's move expands upon its previous requirement for all management and corporate staff to be fully vaccinated by Oct. 4. In addition, the company announced last month that it would require all of its workers, including those who are vaccinated in areas with high infection rates, to wear masks. 

Other companies that have rolled out new vaccine requirements include Disney, Facebook, Google, Uber, Equinox Group, Tyson Foods, United Airlines, Citigroup, McDonald's and the New York Stock Exchange. 

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For the second quarter of fiscal 2022, Walmart reported overall net sales of $139.9 billion, up 2.2% year-over-year, and overall revenue of $141 billion, up 2.4% year-over-year. Walmart's net income fell 34% to $4.28 billion, or $1.52 per share, compared to $6.48 billion, or $2.27 per share, a year ago. Adjusted for one-time items, Walmart earned $1.78 per share.

In the U.S., Walmart's net sales grew 5.3% to $98.2 billion, with comparable U.S. sales growth of 5.2%, comparable transactions growth of 6.1%, and e-commerce net sales growth of 6%. Comparable sales in Walmart's core grocery business grew by mid-single digits while its health and wellness comparable sales grew in the mid-teens due to the administration of COVID-19 vaccines. 

Meanwhile, the company's international net sales fell 15.2% to $23 billion, a decrease of $4.1 billion, attributed to approximately $8.9 billion in divestiture costs. Net sales growth increased 6.7% in Mexico and Central America and 6% in China, but decreased 3.7% in Canada. As for comparable sales, Mexico and Central America saw a 5.4% increase, China saw a 2.9% increase, and Canada posted a 3.6% decrease.

While Walmart executives cited "a bit more cost inflation than normal," the company is working with its suppliers and monitoring gaps to keep its prices low while managing its margins. Walmart is also adding extra lead time to orders and chartering vessels specifically for the company's goods in order to ensure enough supply in preparation for the third and fourth quarter.  

For the full year, the company expects overall net sales growth between 6% and 7%,  or an increase of more than $30 billion, excluding divestitures, overall earnings per share in the range of $6.20 to $6.35 and comparable sales growth for Walmart U.S. between 5% and 6%, excluding fuel. 

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