Walmart revenue boosted by ‘high-income’ shoppers

Walmart said comparable store sales in its U.S. business rose 3.8 percent from the year-ago quarter. Its US e-commerce business rose 22 percent. Walmart has outperformed retailers that rely on apparel sales because it also sells essentials like groceries. Consumers continue to look for ways to save on their purchases after high inflation.

Transactions rose 3.8 percent, while the average ticket price per visit remained the same as people spent this time last year. Walmart’s quarterly profit, at $5.1 billion, was more than triple the result from a year earlier.

The retailer says consumers “from higher-income households” have helped gain market share, reiterating a trend it has noted since Americans began navigating higher inflation a few years ago.

Over the past three years, Walmart has had a larger share of households earning more than $100,000 than any other income bracket, according to Neil Sanders of Global Data, an analytics and consulting firm.

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

“In a sea of ​​challenging and volatile and chaotic consumer spending,” said David Silverman, retail analyst at Fitch Ratings, “it’s interesting how strong and consistent Walmart has been this quarter and many of the last few quarters.”

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

As groceries continue to bring people into stores, Walmart has launched a private label line Best stuff, which offers upscale fare like plant-based and gluten-free options. New products like these will help Walmart connect with the younger and wealthier customers it won during the peak of inflation.

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

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

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

The business, which more than doubled in the most recent quarter, helps suppliers make sure their products are “relevant to the customers Walmart has today,” Mark Hardy, who helps oversee the site, said in an interview.

Not all businesses live up to the company’s credo. At the end of April, Walmart said it would close 51 health centers in five states. It said the venture, launched in 2019, was not profitable due to a “challenging reimbursement environment and rising operating costs”.

Walmart said Tuesday it has cut several hundred corporate roles, while declining to specify which areas. It has been pushing to bring workers back into offices and relocate employees in its technology division to its headquarters in Bentonville, Ark., the San Francisco Bay Area or the New York area. A company spokeswoman said workers who decide not to transfer will be cut.

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