Walmart’s second-quarter earnings beat expectations, the company reported Thursday. The US retail giant raised its full-year guidance as it beat second-quarter sales and profit estimates, fueled by strong consumer demand for low-priced groceries and health and wellness products.
Strong earnings
The earnings report from the world’s largest retailer certainly pleasantly surprised. The strong display bodes well for back-to-school and seasonal purchases. Sales at Walmart’s US stores rose 6.4%, excluding fuel, during the second quarter, beating estimates for a 4.4% increase.
Average transactions and the number of items shoppers put in their carts also increased, the company said.
Consumers “endure”
Shoppers continue to be “picky and discerning” and focus on buying food and health and wellness products. Shoppers responded strongly to seasonal products such as the holidays and the back-to-school season, indicating that the consumer is showing a willingness to spend.
Those signs contributed to Walmart’s decision to raise its forecast to between 4% and 4.5% from 3.5% previously. US consumers have shown resilience despite rising interest rates and higher prices this year.
U.S. retail sales rose more than expected in July as Americans spent more online and dined out more. Rising wages and consumer confidence are leading U.S. households to continue spending.
However, American consumers are seeing their purchasing power diminish next year due to rising energy costs and student loan payments due in October.
