Walmart's Shares Soar as Holiday Strategy and High-Income Shoppers Boost Annual Outlook
1min read Amidst a promising start to the holiday season and robust demand from budget-conscious American consumers, Walmart has increased its annual outlook. The retailer's share price surged by 4.5% on Tuesday, significantly boosting its market valuation. To date, Walmart's shares have climbed approximately 65% this year, outstripping the S&P 500 index.
Despite a deceleration in transaction volume over the past quarter, Walmart shoppers have increased their average transaction value, primarily driven by higher-income households with annual earnings of $100,000 or more. This indicates that while customers are becoming more discerning, the pace of spending remains consistent, according to Chief Financial Officer John David Rainey.
Headquartered in Bentonville, Arkansas, the retail giant now forecasts its full-year net sales to rise between 4.8% and 5.1%, up from its earlier prediction of 3.75% to 4.75%. As one of the first major retailers to report earnings ahead of the critical holiday period, Walmart has moved its Thanksgiving promotions forward by several weeks. This strategy aims to attract shoppers who feel the pinch from high inflation and the stress of a turbulent election season, especially given this year's shorter holiday window due to a later Thanksgiving.
During a conference call on Tuesday, executives expressed confidence entering the holiday season. Rainey confirmed strong sales of AirPods, TVs, and tires up to that point. For the quarter ended October 25, Walmart's comparable store sales in the U.S. rose by 5.3%, surpassing analysts' expectations of 3.73%. Additionally, adjusted earnings per share reached 58 cents, beating anticipated figures. The company stated that its improved yearly guidance largely reflects its strong third-quarter performance, with expectations of continued improvement in the current quarter.