NEW YORK — Walmart had another quarter of strong sales that nearly exceeded all expectations, with its relatively low prices proving to be a powerful draw for millions who fought with rising costs of housing, groceries and just about everything.
The country’s largest retailer also raised its forecast for the full year 2019.
Walmart Inc. reported profit of $4.5 billion, or 56 cents a share, for the three months ended July 31. That compares with $7.9 billion, or 97 cents a share, in the same period last year. Adjusted earnings per share were 67 cents, or 2 cents better than Wall Street had expected, according to FactSet.
Revenue rose nearly 4.8% to $169.33 billion, also beating expectations.
Comparable store sales, which include online and stores open in the past 12 months, rose 4.2% in the U.S., compared with 3.8% in the first quarter, and 4%, in the fourth quarter
Global e-commerce sales grew 21%, on pace with the first quarter.
Before the opening bell on Thursday, shares of Walmart rose 6%, lifting the Dow Jones Industrial Average.
Walmart, based in Bentonville, Arkansas, is one of the first major U.S. retailers to report quarterly results. The figures provide insight into how Americans feel about their purchasing power, and there are signs that the overheated U.S. economy is finally cooling.
US Employer Hiring Rates Dropped surprisingly sharp in July and the unemployment rate rose for the fourth straight month by higher interest rates which is taking a toll on businesses and households. The strong U.S. economy is a major driver of global economic growth, and the U.S. labor market has given Americans the financial means to keep spending.
The Labor Department said Wednesday that year-on-year inflation reached a more than three-year low in July, the latest sign that the worst price rise in four decades is slowing and the Federal Reserve is set to cut rates in September. But that doesn’t mean prices have fallen overall and that consumers are still struggling.
The effects of these higher costs are beginning to show in the performance of US retailers and their sales.
Home Depot reported quarterly results on Tuesday, noting that customers are still keeping a lid on their spending.
Walmart has been ramping up the markdowns, and in the most recent quarter, Walmart implemented 7,200 markdowns. Walmart’s grocery markdowns increased by 35%.
In July, Walmart launched its largest store brand food brand in 20 years in terms of breadth of items, hoping to reach younger shoppers who aren’t loyal to supermarket brands and are looking to reduce their grocery bill spending. Walmart said it expects to have a total of 300 products under the Bettergoods label by the fall, ranging from frozen foods and dairy to coffee and chocolate.
Before the start of the new school year, Walmart has rolled out its 30-year-old brand name, No limits. to meet the needs of Gen Z customers. The No Boundaries label overhaul is part of a strategy to help customers see Walmart as a place to buy cool clothes, along with with groceries.