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Walmart, the largest U.S. retailer, on Thursday reported higher first-quarter sales and profits, giving a sense of how consumer spending is weathering the high interest rate environment.
The numbers: Sales grew in stores and especially online.
Walmart said its comparable-store sales in its U.S. business rose 3.8 percent from the year-earlier quarter. Its global e-commerce business increased 21 percent. Walmart has fared better than retailers that rely on selling clothing, in part because it also sells essential products like groceries. Consumers continue to find places to reduce their purchases.
Transactions increased by 3.8 percent, while the average ticket price showed that with each visit people were spending about the same as this time last year. The retailer said consumers from “high-income households” helped it gain market share, reiterating a trend it has seen since Americans began facing high inflation a couple of years ago.
Walmart’s quarterly profit of $5.1 billion tripled the previous year’s result.
Shares of the retailer rose in premarket trading as investors reacted to last quarter’s results and the company’s improved growth forecast for this year.
The bigger picture: looking for new areas of potential growth.
In recent months, Walmart has been making decisions about where to invest and what to abandon.
As groceries continue to draw people to stores, Walmart has introduced a private label line called Bettergoods, which offers more upscale pricing, such as plant-based and gluten-free options. New products like these could help Walmart retain the younger, wealthier customers it gained during inflation spikes.
Walmart’s quarterly earnings were also boosted by growth in its advertising business. Its global advertising sales increased 24 percent in the latest quarter.
Additionally, Walmart has been investing in Walmart Connect, an advertising business it sees as a growth engine. The company acquired smart TV company Vizio this year in a deal valued at $2.3 billion. Walmart sees shopping as a way to connect advertisers with potential buyers, increasing sales within Walmart stores and website.
But not all companies have lived up to the company’s hopes. In late April, Walmart said it would close its 51 healthcare facilities in five states. He said “the challenging reimbursement environment and rising operating costs” had made the initiative, launched in 2019, unprofitable.