Walmart (WMT) flipped into positive territory in early trading on Thursday after highlighting on the earnings conference call that spending continues to be resilient in the U.S. Interestingly, Walmart said that growth at its U.S. stores was led by upper-income households, while it noted pressure on households below the $50K annual earnings level.
New CEO John Furner noted on the call that the retail giant is gaining market share with momentum in growth areas like Marketplace, advertising, and membership. He also noted that Walmart+ membership income was up double-digits during the key holiday quarter. Notably, Walmart (WMT) is continuing to add market share in the grocery business, as well as surprising categories such as fashion.
Furner said Walmart’s (WMT) goal is to outperform guidance, but the company thinks it is prudent to start the year with a cautious outlook due to the various macroeconomic factors in play.
On Wall Street, Jefferies analyst Corey Tarlowe thinks Walmart (WMG) will continue to beat and raise throughout the year. Importantly, Walmart’s (WMT) order volume and transaction count continued to trend positively, reinforcing its value proposition across income cohorts. He also pointed to the announced new $30B share repurchase authorization as supportive of the stock. Morgan Stanley analyst Simeon Gutman highlighted that the “flywheel/retailer of the future” story on Walmart (WMT) is intact and continuing to progress. “Our constructive view on WMT is underpinned by the company growing sales faster than the market and its own prevailing run rate – suggesting share gains as the big-get-bigger dynamic continues via scale and technology,” he wrote.
Shares of Walmart (WMT) were up 2.1% in Thursday morning trading.