Home Economy Walmart Stock Hits Record Close in Strong Quarter

Walmart Stock Hits Record Close in Strong Quarter

by SuperiorInvest

Walmart said its U.S. comparable-store sales rose 3.8 percent from the year-earlier quarter. Its U.S. e-commerce business increased 22 percent.

Walmart has fared better than retailers that rely on selling clothing, in part because it also sells essential products like groceries. Consumers, especially those with lower incomes, are looking for places to save after a period of high inflation.

Transactions increased by 3.8 percent, while the average ticket price showed that people were spending about the same with each visit as this time last year. Walmart's quarterly profit of $5.1 billion tripled the previous year's result.

Walmart shares rose 7 percent, closing at a record $64, as investors reacted to the company's results and improved growth forecast for this year.

The retailer said consumers from “high-income households” helped it gain market share, reiterating a trend it has seen since Americans began facing high inflation a couple of years ago.

In an interview, John David Rainey, Walmart's chief financial officer, noted the company's focus on making shopping more convenient through features like curbside pickup and delivery, as well as diversifying its product offerings. particularly online.

“You think about things like AirPods, MacBook Air — these are items that certainly appeal to a high-income demographic,” Rainey said. “The more we get into that space and offer a wide variety like that, I think the more we'll retain this cohort.”

Over the past three years, households earning more than $100,000 have provided the biggest gains in market share for Walmart, according to Neil Saunders of GlobalData, an analytics and consulting firm.

“In a sea of ​​contested, volatile and confusing consumer spending,” said David Silverman, a retail analyst at Fitch Ratings, “what's interesting is how strong and consistent this quarter and many of Walmart's past quarters have been.”

Walmart has been making decisions about where to invest.

As groceries continue to draw people to stores, it has introduced a private label line called Bettergoods, which offers more upscale items, such as plant-based and gluten-free options. New products like these could help Walmart retain the younger, wealthier customers it gained during inflation spikes.

Walmart's profits were also helped by growth in its advertising business, which grew 24 percent in the latest quarter. The company acquired smart TV company Vizio this year in a deal valued at $2.3 billion. Walmart sees shopping as a way to increase sales by connecting advertisers with potential buyers.

Walmart also said it would expand a subscription platform that gives suppliers and merchants a real-time view of product performance. The platform, Walmart Luminate, will be available in Mexico and Canada this year.

The business, which doubled in the last quarter, helps suppliers ensure their products are “relevant to the customers Walmart has today,” Mark Hardy, who helps oversee the platform, said in an interview.

Not all companies have lived up to the company's hopes. Last month, Walmart said it would close its 51 health care centers in five states. He said the initiative, started in 2019, had not proven profitable.

And Walmart said this week that it had eliminated several hundred corporate positions, without giving details. It has pushed to return workers to offices and will relocate employees in its technology division to its headquarters in Bentonville, Arkansas, in the San Francisco Bay area or in the New York area.

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