Walmart Earnings Boosted by ‘Upper-Income’ Shoppers

Walmart said its comparable-store sales in its U.S. business rose 3.8 percent from the quarter a year earlier. Its U.S. e-commerce business jumped 22 percent. Walmart has performed better than retailers dependent on apparel sales, in part because it also sells essential goods like groceries. Consumers are continuing to find places to save on their purchasing after a stretch of high inflation.

Transactions were up 3.8 percent, while the average ticket price showed with each visit people were spending about the same as they did this time last year. Walmart’s quarterly profit, of $5.1 billion, was triple the result a year earlier.

The retailer said consumers from “upper-income households” helped it gain market share, reiterating a trend it has noted since Americans started navigating high inflation a couple of years ago.

Over the past three years, Walmart has gained more share among households earning over $100,000 than any other income bracket, according to Neil Saunders of GlobalData, an analytics and consulting firm.

Walmart’s stock rose in premarket trading, as investors reacted to last quarter’s results and the company’s upgraded forecast for growth this year.

“In a sea of challenged and volatile and confusing consumer spending,” said David Silverman, a retail analyst at Fitch Ratings, “what’s interesting is how strong and consistent this quarter and many of Walmart’s last few quarters have been.”

In recent months, Walmart has been making decisions about where to invest.

As groceries continue to bring people into the stores, Walmart has introduced a private-label line called Bettergoods, which offers more upscale fare like plant-based and gluten-free options. New products like these could help Walmart hang on to younger and wealthier customers it won over during the heights of inflation.

Walmart’s earnings were also boosted by the growth in its advertising business, which grew 24 percent in the latest quarter.

The company acquired the smart-TV company Vizio this year in a deal valued at $2.3 billion. Walmart sees the purchase as a way to increase sales by connecting advertisers with potential shoppers.

On Thursday, Walmart also said it would expand its subscription platform that gives suppliers and merchants a real-time view into how products are performing. The platform, Walmart Luminate, will be available in Mexico and Canada starting later this year.

The business, which doubled in the latest quarter, helps suppliers make sure that their products are “relevant to the customers that Walmart has today,” Mark Hardy, who helps oversee the platform, said in an interview.

Not all businesses have lived up to the company’s hopes. At the end of April, Walmart said it was shutting its 51 health care centers across five states. It said “challenging reimbursement environment and escalating operating costs” had made the initiative, begun in 2019, unprofitable.

Walmart on Tuesday also said it had cut several hundred corporate roles, while declining to detail which parts. It has been pushing to bring workers back to offices and relocating employees in its tech division to its headquarters in Bentonville, Ark., to the San Francisco Bay Area or to the New York area. Workers who decide not to relocate will receive severance, a company spokeswoman said.

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