Walmart boosts 2024 outlook with deals that lure inflation-weary buyers

NEW YORK (AP) — Walmart reported another quarter of strong sales that exceeded nearly all expectations, with relatively low prices proving a strong draw for millions of people who have struggled due to the rising costs of housing, groceries and just about everything else.

The country’s largest retailer also raised its forecasts for the full year.

Walmart Inc. reported profit of $4.5 billion, or 56 cents a share, in the three months ended July 31. That compares with $7.9 billion, or 97 cents a share, in the same period a year ago. Adjusted earnings per share were 67 cents, 2 cents above Wall Street’s estimate, according to FactSet.

Sales rose almost 4.8% to $169.33 billion, also beating expectations.

Comparable-store sales—which include online stores and stores opened in the past 12 months—in the U.S. rose 4.2%, up from 3.8% in the first quarter and 4% in the fourth quarter

Global e-commerce sales rose 21%, unchanged from the first quarter.

Walmart shares rose 6% before the open on Thursday, leading the Dow Jones Industrial Average to rise.

Walmart, based in Bentonville, Ark., is one of the first major U.S. retailers to report quarterly results, providing a window into how Americans view their spending power amid signs that the red-hot U.S. economy may finally be cooling off.

Employment by American employers has fallen surprisingly sharp in July and the unemployment rate rose for the fourth month in a row higher interest rates This has had an impact on businesses and households. A strong U.S. economy has been a key driver of global growth, and the U.S. job market has provided Americans with the financial resources to continue spending.

The Department of Labor reported on Wednesday that inflation year on year hit its lowest level in more than three years in July, the latest sign that the worst price rally in four decades is fading and has the Federal Reserve poised to cut interest rates in September. But that doesn’t mean prices have fallen as a whole, and consumers are still struggling.

The impact of higher costs has begun to show in sales and results at U.S. retailers.

Depot House reported quarterly results on Tuesday and noted that customers continued to cut spending.

Walmart increased its discounts and recorded 7,200 price cuts in the last quarter. The number of grocery price cuts at Walmart increased by 35%.

In July, Walmart launched its largest food brand under the store brand in 20 years in terms of assortment breadth, hoping to reach younger shoppers who aren’t loyal to grocery brands and want to cut their grocery bills. Walmart said it expects to have a total of 300 products under the Bettergoods brand by the fall, from frozen foods and dairy to coffee and chocolate.

Back to school, Walmart has revamped its 30-year-old brand No boundaries. to meet the expectations of Gen Z customers. The No Boundaries brand overhaul is part of a strategy to convince customers to see Walmart as a place to buy cool clothes, as well as with grocery shopping.