Washington (AFP) – US retail giant Walmart reported higher quarterly revenue Thursday and raised its financial outlook, in better-than-expected results as it won over households hit by rising costs of living. The earnings report of Walmart, which caters to buyers across income groups, is seen as a key gauge of consumer behavior as Americans become more price-sensitive. The company’s revenues rose 5.8 percent to $179.5 billion for the three months ending October 31, exceeding analyst expectations. Its earnings per share also came in above estimates at 62 cents.
Walmart lifted its outlook for the fiscal year too, saying it expected net sales to grow between 4.8 percent and 5.1 percent, up from a previously anticipated 3.75 percent to 4.75 percent increase. “We saw strength across income cohorts, and especially with higher-income households,” said Walmart chief executive Doug McMillon in an earnings call. In the United States, he added, consumers are “still spending, with upper- and middle-income households driving our growth,” while lower-income families face more pressure.
Investors have been watching for signs that consumers feel the squeeze from higher costs as President Donald Trump’s tariffs flow through the world’s biggest economy. There has not been a sharp inflation surge since he imposed wave after wave of duties on different sectors and trading partners, but policymakers note that the full effect of steeper duties has yet to be seen. Meanwhile, prices have continued rising, more noticeably in some sectors than others. McMillon noted that the firm was working to resist “upward pressure on our cost of goods.”
Prices at Walmart’s US stores rose 1.3 percent, the company said, lower than overall consumer inflation and a sign that it has been able to ease the effects of Trump’s tariffs. Walmart added that it has seen a smaller impact from duties than it had expected early in the year, and that staff have worked to manage costs by juggling inventory, price gaps, and product offerings. McMillon said in a statement that e-commerce was a “bright spot” this quarter, growing 27 percent globally. Walmart shares rose 5.9 percent around 1845 GMT.
Thursday’s report came shortly after fellow retailer Target posted a fall in quarterly sales, while home improvement chain Home Depot reported lower-than-expected demand in results earlier this week. This underscored concerns about US consumption, a key driver of the economy in recent years. Consumer spending, propped up by a resilient jobs market, had buoyed the economy in the wake of the Covid-19 pandemic. But the jobs market has been cooling, while businesses find themselves hit by higher import costs. Consumers, in turn, have become more price-sensitive.
Walmart said Thursday that it saw gains across categories in its US market, ranging from groceries to general merchandise. The big-box retailer added that “customer value proposition with everyday low prices and increased convenience is resonating.” It said its revenue uptick came with strength across all segments. Neil Saunders, managing director of GlobalData, noted that Walmart has acquired new shoppers from higher income brackets, expanding from its core footprint of groceries and essentials. “While the gains currently being made here are not quite as sharp as they were a couple of years back, the numbers are still rising as more people turn to Walmart for great value and to save money,” he added.
Walmart’s earnings are closely monitored this quarter also as policymakers and investors saw a pause in official economic data releases during a record-long government shutdown between October and mid-November. On Thursday, Walmart said it will transfer the listing of its common stock to the Nasdaq, and start trading there on December 9. Come February 2026, CEO McMillon will be succeeded by John Furner, who has served as president of Walmart US.
© 2024 AFP
