Walmart’s “Save Money. Live Better” strategy continues to pay off for the Bentonville retailing giant.
The company last week reported a better-than-expected 7.6% increase in sales, to $152.3 billion. The all-important U.S. comparable sales, from stores and digital channels operating for at least 12 months, rose 7.4% compared with year-ago levels, slightly below the growth of the previous quarter.
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Walmart raised its outlook on sales and profits for the year, forecasting net sales to increase 3.5% for the fiscal year and operating income to grow up to 4.5%. Walmart said it gained market share in grocery sales, including among higher-income households.
The company also reported that its Sam’s Club division had its largest quarterly member sign-up on record.
“We had a strong quarter,” company CEO Doug McMillon said. “Comp sales were strong globally with eCommerce up 26%. We leveraged expenses, expanded operating margin, and grew profit ahead of sales.”
Retailers like Target and Home Depot, meanwhile, last week reported that their first-quarter sales had fallen from the surges experienced during the pandemic as consumers focus on buying necessities and pull back from big-ticket or discretionary purchases.
And McMillon did note that this pullback in categories like apparel and home goods is causing uncertainty for the company. “The persistently high rates of inflation in these categories, lasting for such a long period of time, are weighing on some of the families we serve,” he said.
It’s not original to observe that this is a strange economy. Unemployment remains at record low levels and wage growth is strong, but interest rates are high and inflation, though moderating, remains a worry. Nevertheless, despite predictions, the U.S. remains recession-free — for now.
Walmart continues to be an innovator. Its earnings report noted its commitment to building an EV fast-charging network at thousands of its stores across the United States, which Arkansas Business wrote about in our May 8 issue. But the retailer’s continued commitment to “everyday low prices” is winning the patronage of inflation-beset consumers — and generating strong sales.