NEW YORK – Walmart has once again reported impressive sales figures, drawing shoppers with its fast delivery services and competitive pricing, which appeal to consumers from various income levels.
However, like many other big retailers releasing financial updates this week, Walmart is expressing caution about the economic outlook for the remainder of the year. On Thursday, the company released a forecast for the upcoming quarter that fell short of Wall Street’s expectations, reflecting the prevailing economic uncertainties.
As inflation continues to impact consumer spending, Walmart has become increasingly appealing to Americans seeking value for their money, especially since tensions heightened in Iran in late February. With over 150 million customers visiting its stores or browsing its website weekly, Walmart serves as a significant indicator of consumer spending habits.
Walmart’s strategy of offering low prices, enhanced product selections, and quicker delivery has attracted a broader customer base, including wealthier shoppers. Notably, households earning over $100,000 annually have contributed significantly to Walmart’s market share growth. This trend emerges as lower-income shoppers find themselves in a more challenging economic position, often referred to as a K-shaped recovery.
CEO John Furner highlighted the company’s achievements, stating, “Our results reflect our continued focus on delivering across the enterprise — better shopping experiences, a broader assortment, and faster delivery.”
Nonetheless, U.S. retailers have been grappling with economic uncertainty for months, initially spurred by tariffs imposed during President Donald Trump’s administration and now exacerbated by rising gasoline prices due to the ongoing conflict. This week, gasoline prices surged again, climbing 40% compared to the same period last year, adding another layer of complexity to the retail landscape.
Based on early reports from retailers including Target and Home Depot, shoppers are cautious but still spending, helped by more generous tax refunds, economists said. Yet there is a widespread belief that once of those benefits dry up, shoppers will pull back their buying
Target reported the largest jump in comparable sales in four years Wednesday, but a cautious outlook overshadowed convincing evidence that changes under the company’s new CEO are resonating with customers. Target raised its annual revenue outlook, but the upgraded sales expectations were still below the pace of the first quarter given so much economic uncertainty.
The nation’s two largest home improvement retailers Home Depot and Lowe’s this week reported a sales lift from professionals and also homeowners stocking up on spring supplies. But executives from both companies said that customers are still holding back on larger discretionary home projects.
“I think, overall, this has been the most difficult housing market that that I’ve faced in this business since the financial crisis, ” Lowe’s CEO Marvin Ellison told analysts on Wednesday.
Walmart, based in Bentonville, Arkansas reported first-quarter earnings of $5.33 billion, or 67 cents for the quarter ended April 30. Adjusted per-share results were 66 cents, matching the 66 cents that analysts expected, according to FactSet.
For the year-ago quarter, the company reported net income of $4.48 billion, or 56 cents per share.
Sales rose 7.3% to $177.75 billion in the fiscal first quarter, above the $174.84 billion that analysts predicted,
Comparable sales at U.S. Walmart stores, including online sales, rose 4.1% during the three-month period ended April 30. That’s below the 4.6% gain in the fourth quarter.
The company said Thursday that consumers are feeling some economic pressure, but sales strength has persisted and it saw one of its strongest quarters of market share gains.
For the second quarter, Walmart expects sales will be 4% to 5% higher than the same period a year ago. That brings the range to between $182.8 billion and $184.59 billion. It also expects per-share profit to be between 72 cents and 74 cents. Analysts had been projecting per-share earns of 75 cents on sales of $186.2 billion, according to FactSet.
For the year, Walmart stuck to the guidance it issued in February of per-share earnings between $2.75 and $2.85, and an increase in sales of between 3.5% and 4.5%, or between $731.1 billion and $738.2 billion.
Wall Street has been anticipating profits of $2.92 per share on sales of $749.01 billion for the year.
