NEW YORK — Walmart posted another quarter of strong sales that exceeded nearly all expectations, and its relatively low prices proved a powerful draw for millions of people struggling with rising costs for housing, food and almost everything else.
As a sign of confidence in its business model, the country’s largest retailer also raised its forecast for the full year.
Walmart Inc. reported profit of $4.5 billion, or 56 cents a share, for the three months ended July 31. It reported profit of $7.9 billion, or 97 cents a share, for the same period a year earlier. Adjusted earnings per share were 67 cents, 2 cents better than Wall Street expected, according to FactSet.
Revenue rose nearly 4.8% to $169.33 billion, also exceeding expectations.
Comparable store sales – which include online sales and stores open for 12 months – rose 4.2 percent in the U.S., up from 3.8 percent in the first quarter and 4 percent in the fourth quarter.
Global e-commerce sales increased 21%, remaining at the same level as the first quarter.
The number of transactions and the average amount customers spent on each of those transactions at Walmart was higher than in the same three months last year.
And in a potentially encouraging development, Walmart reported that sales of essentials such as clothing and electronics were flat or up slightly. Americans have spent the last two years focusing like a laser on essentials, skipping non-essential goods and spending money on groceries and other everyday items instead.
Walmart shares rose 6% before the market opened on Thursday, dragging the Dow Jones Industrial Average along with it.
Walmart, based in Bentonville, Arkansas, is among the first major U.S. retailers to report its quarterly results, offering insight into how Americans feel about their purchasing power amid signs that the overheated U.S. economy may finally be cooling down.
Hiring by U.S. employers fell by a surprising amount in July and the unemployment rate rose for the fourth month in a row as higher interest rates weighed heavily on businesses and households. The strong U.S. economy has been a key driver of global economic growth, and the U.S. labor market has given Americans the financial wherewithal to continue spending.
The U.S. Labor Department said Wednesday that inflation hit its lowest level in more than three years in July, another sign that the worst price increase in four decades is easing and the Federal Reserve plans to cut interest rates in September. But that doesn’t mean prices have fallen overall, and consumers are still struggling.
The impact of these higher costs is now being felt in the performance and sales of US retail.
Home Depot reported its quarterly results on Tuesday, noting that customers continue to hold back on spending.
Walmart has increased discounts and last quarter there were 7,200 price cuts at Walmart. The number of grocery price cuts at Walmart increased by 35%.
In July, Walmart launched its largest private-label grocery brand in 20 years, measured by product variety, in hopes of reaching younger customers who aren’t tied to food stamps and want to reduce their grocery spending. Walmart expects to offer a total of 300 products under the Bettergoods brand by fall, from frozen foods and dairy to coffee and chocolate.
For back-to-school season, Walmart has revamped its 30-year-old No Boundaries brand to appeal to Generation Z customers. Revamping the No Boundaries label is part of a strategy to get customers to see Walmart as a place where they can buy not just groceries, but also cool clothes.
Walmart now expects earnings per share for the full year to be in the range of $2.35 to $2.43. This is an increase from the previous estimate of $2.23 per share to $2.37 per share. Analysts had forecast $2.44 per share, according to FactSet.
The retailer expects sales to increase by between 3.75 and 4.75 percent this year. It had previously expected sales to increase by 3 to 4 percent.
