NEW YORK (AP) — Walmart had another quarter of strong sales that topped almost all expectations with its comparatively low prices proving a powerful draw for millions who have struggled with rising costs for housing, groceries and almost everything else.
The nation’s largest retailer raised its full-year outlook and executives said their customers may still be holding out for deals, but they're not seeing any signs that they're fraying.
“So far, we aren’t experiencing a weaker consumer overall,” CEO Doug McMillon told industry analysts Thursday.
Evidence of a resilient U.S. consumer is apparent across the entire retail sector.
The U.S. reported Thursday that Americans stepped up their retail spending last month in the largest leap in a year and a half. At least on Thursday, that helped ease concerns that a sustained campaign by the U.S. Federal Reserve to cool spending with higher interest rates may have gone to far and damaged the main driver of the U.S. economy, the consumer.
Walmart is among the first major U.S. retailers to report quarterly results and provides a peek into how Americans are feeling about their spending power, which came into question recently after hiring by U.S. employers fell surprisingly hard in July and the unemployment rate rose for the fourth straight month. The strong U.S. economy has been a main driver of global economic growth and the U.S. jobs market has given Americans the financial wherewithal to keep spending.
Yet the July hiring data that shook markets has been repeatedly offset by broader economic trends pointing to a steadily improving environment for both consumers and retailers.
The Labor Department said Wednesday that year-over-year inflation last month reached its lowest level in more than three years, another hint that the worst price spikes in four decades are fading and setting up the Federal Reserve for an interest rate cut in September. That doesn't mean prices overall are falling, but wages and the cost of living appear to be coming more inline after the pandemic skewed the economy.
Walmart Inc. reported earnings of $4.5 billion, or 56 cents per share, in the three months ended July 31. That compares with $7.9 billion, or 97 cents per share, in the same period last year when it booked big investment gains. Adjusted per share earnings were 67 cents, or 2 cents better than Wall Street had expected, according to FactSet.
Sales rose nearly 4.8% to reach $169.33 billion, also beating expectations.
Comparable store sales — which include online and stores open for the past 12 months — rose 4.2% in the U.S. That compares with 3.8% in the first quarter, and 4%, in the fourth quarter
Global e-commerce sales rose 21%, matching the first quarter's pace.
The number of transactions and the average amount customers spent during each of those transactions at Walmart was higher in this quarter than it was during the same three months last year.
And in a potentially encouraging shift, Walmart said sales of discretionary items like clothing were flat to very slightly positive. Americans for two years have maintained a laser-like focus on the essentials, taking a pass on goods that are not absolutely necessary, and spending that money instead on groceries and other basics.
John David Rainey, Walmart's chief financial officer, told The Associated Press in a phone interview that the improvement was a result of several factors: deflationary prices in general merchandise, which helped attract more shoppers, and improved offerings on the shelf from Walmart. Rainey cautioned that shoppers are still choosy and they're gravitating more toward store label goods and waiting for sales.
In July, Walmart launched its biggest store-label food brand in 20 years in terms of the breadth of items, hoping to reach younger customers who are not loyal to grocery brands and are seeking to cut their grocery bills. Walmart said it expects to have a total of 300 products under the Bettergoods label by the fall, ranging from frozen foods to coffee and chocolate.
Grocery prices, however, have remained stubbornly high, Rainey said.
Walmart has stepped up discounts and during the most recent quarter it had 7,200 price rollbacks, a 35% increase.
For back-to-school, Walmart retooled its 30-year-old brand called No Boundaries. to cater to Gen Z customers. The retooling of the No Boundaries label is part of a strategy to get customers to think of Walmart as a place to buy cool clothes, along with groceries.
For the year, Walmart said it now expects earnings per share to be in the range of $2.35 to $2.43. That's up from its previous estimate of $2.23 per share to $2.37 per share. Analysts projected $2.44 per share, according to FactSet.
The retailer is projecting annual sales to be up anywhere from 3.75% to 4.75%. It had previously expected sales would rise 3% to 4%.
Shares of Walmart Inc., based in Bentonville, Arkansas, jumped 7% Thursday.
Walmart boosts its outlook for 2024 with bargains proving a powerful lure for the inflation weary
Walmart boosts its outlook for 2024 with bargains proving a powerful lure for the inflation weary
FILE - A worker organizes bicycles at a Walmart Superstore in Secaucus, New Jersey, July 11, 2024. Last month's rise in the unemployment rate has set off new worries about the threat of a recession, but it could also be a false alarm. The distorted post-pandemic economy has already confounded a host of traditional recession signals, at least so far. (AP Photo/Eduardo Munoz Alvarez, File)
Israeli strikes on Palestinian territories have killed more than two-dozen Palestinians on Wednesday, according to local officials. They say an Israeli airstrike killed five Palestinians in the occupied West Bank, and at least 20 people, including 16 women and children, were killed in the Gaza Strip.
Gaza’s Health Ministry says Tuesday's strike on a tent camp in an Israeli-designated humanitarian zone killed at least 19 people.
The Health Ministry says over 40,000 Palestinians have been killed in Gaza since the Israel-Hamas war began. It does not differentiate between fighters and civilians in its count. The war has caused vast destruction and displaced around 90% of Gaza’s population of 2.3 million, often multiple times.
Hamas-led militants killed some 1,200 people, mostly civilians, in their Oct. 7 attack that sparked the war. They abducted another 250 and are still holding around 100. Around a third of them are believed to be dead.
Here's the latest:
DEIR AL-BALAH, Gaza Strip — Hamas released the first public statement from Yahya Sinwar since he was appointed its overall leader in August.
In the written statement late Tuesday, Sinwar congratulated Algeria’s President Abdelmadjid Tebboune on his reelection and thanked the country for its support for the Palestinian cause. Algeria, the Arab representative on the United Nations Security Council, circulated a draft resolution in May demanding an immediate cease-fire in Gaza and a halt to Israel’s military operation in the southern city of Rafah.
A hard-liner within Hamas, Sinwar would have to approve any potential agreement for a cease-fire and hostage release. The United States, Qatar and Egypt have spent most of the year trying to broker such a deal but the negotiations have repeatedly stalled.
Sinwar was one of the architects of the Oct. 7 attack into Israel that ignited the war in Gaza. He has not been seen since the start of the war and is believed to be alive and hiding inside the territory. Israel has vowed to kill him.
RAMALLAH, West Bank — An Israeli airstrike has killed five Palestinians in the occupied West Bank, Palestinian officials say.
The Israeli military said it targeted a group of militants in the northern city of Tubas early Wednesday.
The Palestinian Health Ministry in the West Bank confirmed the toll but does not say whether those killed by Israeli fire are militants or civilians.
Israel has stepped up its military raids across the territory in recent weeks and says it is working to dismantle militant groups and prevent attacks. Palestinians say such operations are aimed at cementing Israel’s seemingly open-ended military rule over the territory.
Israel captured the West Bank, along with east Jerusalem and the Gaza Strip, in the 1967 Mideast war. The Palestinians want all three territories for their future state. The West Bank has seen a surge in violence since Hamas’ Oct. 7 attack out of Gaza ignited the war there.
DEIR AL-BALAH, Gaza Strip — Palestinian officials say Israeli airstrikes in the Gaza Strip have killed at least 20 people, including 16 women and children.
An airstrike early Wednesday killed 11 people, including six siblings ranging from 21 months to 21 years old, according to the European Hospital, which received the casualties. The dead from the strike near the southern city of Khan Younis included three other women, a child and a man, according to the hospital.
A strike late Tuesday on a home in the urban Jabaliya refugee camp in northern Gaza killed nine people, including six women and children, according to the Gaza Health Ministry and the Civil Defense first responders. The Civil Defense says the home belonged to Akram al-Najjar, a professor at the al-Quds Open University, who survived the strike.
Israel says it only targets militants, claiming 17,000 militant deaths without providing evidence. It blames civilian deaths on Hamas because its fighters are embedded in dense residential neighborhoods. The military rarely comments on individual strikes, which often kill women and children.
The Health Ministry says Israel’s offensive, launched in response to Hamas’ Oct. 7 attack, has killed at least 41,020 Palestinians in Gaza and wounded nearly 95,000. It does not distinguish between fighters and civilians but says more than half of those killed were women and children.
Hamas-led militants killed some 1,200 people, mostly civilians, on Oct. 7 and abducted around 250. Around 100 hostages are still held in Gaza, about a third of whom are believed to be dead.
Blindfolded and bounded protesters take part in a protest against Israeli Prime Minister Benjamin Netanyahu's government and call for the release of hostages held in the Gaza Strip by the Hamas militant group in Tel Aviv, Israel, Tuesday, Sept. 10, 2024. (AP Photo/Ohad Zwigenberg)
This undated photo released by the Israel Defense Forces shows the Gaza tunnel where it says six Israeli hostages were recently killed by Hamas militants. (Israeli Army via AP)
Mourners pray over the covered bodies of Palestinians who were killed in an Israeli airstrike on a crowded tent camp housing Palestinians displaced by the war in the Muwasi, outside the hospital morgue in Deir al-Balah, Gaza Strip, Tuesday, Sept. 10, 2024. (AP Photo/Abdel Kareem Hana)
Palestinians look at the destruction after an Israeli airstrike on a crowded tent camp housing Palestinians displaced by the war in Muwasi, Gaza Strip, Tuesday, Sept. 10, 2024. An Israeli strike killed at least 40 people and wounded 60 others early Tuesday, Palestinian officials said. Israel said it targeted "significant" Hamas militants, allegations denied by the militant group. (AP Photo/Abdel Kareem Hana)
Palestinians look at the destruction after an Israeli airstrike on a crowded tent camp housing Palestinians displaced by the war in Muwasi, Gaza Strip, Tuesday, Sept. 10, 2024. An Israeli strike killed at least 40 people and wounded 60 others early Tuesday, Palestinian officials said. Israel said it targeted "significant" Hamas militants, allegations denied by the militant group. (AP Photo/Abdel Kareem Hana)
Mourners carry the covered bodies of Palestinians who were killed in an Israeli airstrike on a crowded tent camp housing Palestinians displaced by the war in the Muwasi, outside the hospital morgue in Deir al-Balah, Gaza Strip, Tuesday, Sept. 10, 2024. (AP Photo/Abdel Kareem Hana)
