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US retail stalwart, Walmart (WMT, $139.37) reported stronger than expected revenue for the past quarter. Showing signs that Americans are spending even as they pay more for fewer products and are shifting their purchases to mitigate the effects of inflation.
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It’s sales grew by 8% while it’s net income for the quarter rose to $5.15 billion, or $1.88 per share, compared with $4.28 billion, or $1.52 per share a year earlier. E-commerce sales rose 12% compared with the year-ago period and 18% on a two-year basis.
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The retailer, which caters to budget-conscious shoppers, saw more middle- and higher-income customers shop during the second quarter, a shift it said was different from prior economic downturns. The retailer’s reputation as a discounter is attracting more middle- and high-income shoppers. About three-quarters of Walmart’s market share gains in food came from customers with annual household incomes of $100,000 or more.
Why it matters
Walmart's results are watched not only as an indication of its own health but as a measure of the strength of the US economy overall. The results Tuesday were another sign that, despite worrisome indicators of a possible recession in the months ahead, consumer spending remains strong. The retailer is also looking to boost its subscriber base after it struck a deal with Paramount (PARA, $27.20) Global to add it to its essential streaming plan for Walmart+ members.
