Walmart shares are up 3.6% in the pre-market following today’s earnings report. I think this report is probably the best reading on the consumer that we will get before the next Federal Reserve meeting.
The verdict? Pretty good but with some caveats.
Comp sales were up 4.5% in the US and the company raises its outlook for sales growth for the year to 4.8-5.1% (from 3.75-4.75%). The comp sales consensus estimate was 3.8%.
That’s all good but the conference call touched on some familiar themes. Company officials said lower income families have been under additional pressure ‘of late’ and that higher income families are ‘choosing to shop with us more often’. The company said that two-thirds of its growth came from households earning more than $100,000.
Internationally, overall sales rose 10.8% y/y. Mexican same-store sales rose 3.9% compared to 4.4% in the prior quarter. That makes reading the overall economic signals a bit tricky as it’s not clear that WMT’s improving sales is macroeconomic or competitive
