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Walmart Upgrades Annual Forecast Amid Strong Consumer Demand
Walmart has raised its full-year sales and earnings projections, reflecting strong demand from shoppers across income levels. The retail giant reported better-than-expected Q2 results, driven by strategic pricing, e-commerce expansion, and a broader customer base—including higher-income households seeking value amid inflation.
Q2 Earnings Beat Expectations
Walmart’s revenue climbed 6% year-over-year to $161.6 billion, surpassing estimates. Key highlights:
– U.S. comparable sales grew 6.4%, with grocery and private-label products leading the charge.
– E-commerce sales jumped 24%, fueled by online pickup and delivery demand.
– Full-year sales forecast revised to 4–4.5% growth, up from 3.5%, with adjusted EPS expected at $6.36–$6.46.
The upbeat outlook sent Walmart shares up nearly 5% in pre-market trading.
Wealthier Shoppers Choose Walmart for Value
Traditionally a discount retailer, Walmart is now attracting households earning over $100,000, thanks to:
– Expanded premium offerings (organic groceries, high-end electronics).
– Faster checkout options like Scan & Go.
– Consistently low prices on essentials.
“Customers are trading down to Walmart for groceries, apparel, and general merchandise,” said CEO Doug McMillon.
E-Commerce and Advertising Drive Growth
Walmart’s digital sales soared, with 400+ million marketplace items competing with Amazon. Additional growth drivers:
– Walmart+ membership (free shipping, fuel discounts) boosted loyalty.
– Walmart Connect ads surged 35%, leveraging first-party data for targeted campaigns.
Challenges and Holiday Strategy
Despite strong performance, Walmart faces:
– Rising labor and supply chain costs.
– Elevated inventory shrinkage (theft, errors).
For the holidays, Walmart plans extended Black Friday-level deals to attract early shoppers.
The Bottom Line
Walmart’s success highlights its resilience in a tough economy. By blending value, convenience, and premium options, it’s winning over shoppers at every income level—proving that affordability remains king.
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