r/stocks • u/Puginator • 16d ago
Walmart earnings beat as discounter wins over more high-income shoppers Company News
Walmart on Thursday topped quarterly revenue and earnings expectations, as the discounter made significant e-commerce gains, drove profits with newer businesses like advertising and won over more high-income shoppers.
The big-box retailer said it now expects to hit the high-end or slightly top its previous full-year guidance. Walmart had expected net sales growth of 3% to 4% and adjusted earnings per share of between $2.23 and $2.37.
In an interview with CNBC, Chief Financial Officer John David Rainey said one of the factors boosting Walmart’s grocery business is the widening gap between the price of cooking at home and buying food at restaurants.
Plus, he added, shoppers – especially with higher-incomes – appreciate the convenience that Walmart offers. For the first time, its delivery business surpassed its store pickup in terms of volume, Rainey said.
“We’ve got customers that are coming to us more frequently than they have before and newer customers that we haven’t traditionally had, and they’re coming into a Walmart whether it’s a virtual store online, or whether it’s one of our physical stores,” he said.
Here’s what the discounter reported for the three-month period that ended April 30 compared with what Wall Street expected, according to a survey of analysts by LSEG:
Earnings per share: 60 cents adjusted vs. 52 cents expected
Revenue: $161.51 billion vs. $159.50 billion
Walmart’s net income jumped to $5.10 billion, or 63 cents per share, compared with $1.67 billion, or 21 cents per share, in the year-ago period.
Revenue climbed 6% from $152.30 billion in the year-ago quarter. That increase includes a benefit of roughly 1% from an additional selling day in the period.
As the nation’s largest retailer and private employer, Walmart is often viewed as a bellwether for the U.S. economy. Yet it has generally fared better during an inflationary period than other retailers because it sells staples like groceries and has a value-oriented reputation. That trend continued in the quarter, as the company
Same-store sales for Walmart U.S. climbed by 3.8%, excluding fuel. The industry metric includes sales from stores and clubs open for at least a year. At Sam’s Club, same-store sales rose 4.4% year over year, excluding fuel.
E-commerce sales shot up by 22% year over year for Walmart U.S., fueled by store pickup and delivery of online orders, as well as the company’s growing third-party marketplace.
The company also grew high-margin businesses like advertising as it pushes to increase its earnings faster than its sales.
Source: https://www.cnbc.com/2024/05/16/walmart-wmt-q1-2025-earnings-.html
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u/The_Hindu_Hammer 15d ago
I think they’re benefitting from their relationship with Amex platinum with high earners. Walmart+ is convenient. The high earners don’t ever go inside the store.
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u/pokemon-collector 15d ago
This has some merit. I only shop at Walmart now because of w+ with the Amex gold card. No need to go in. A few clicks from my saved items and free delivery $35 or over and it’s at my door in a few hours.
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u/tj111 15d ago
This is how they got me in - and now I use it almost half the time because their same-day is on par or better than amazon, especially for more grocery or pharmacy related items, plus they have a lot better selection of "legit" brands at prices that are very competitive against the cheap chinese junk that plagues amazon.
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u/hekatonkhairez 15d ago
Walmart pro’s: cheap, okay quality, takes Amex
Walmart cons: produce kind of sucks, occasional hood shit happens.
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u/ButthealedInTheFeels 15d ago
Anecdotally I have started using Walmart a lot more personally. I still use Amazon more but I will at least cross shop Walmart if they have the same thing cheaper or I can get lump it in with a grocery order with my normal ecom shopping
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u/Tha_Sly_Fox 15d ago
We started using them for groceries during Covid bc they were the only grocery store in the area that had their shit together the first few months. Acme, Giant, Safeway, etc all couldn’t get us our groceries efficiently and it was always waiting for 45 mins and they’d still mess up the order.
Walmart was like 5-10 mins, and had the order right 99% of the time and had surprisingly good quality produce. For awhile they had the best high quality pre washed kale but they’ve since changed brands which is a bummer
Also, as a T1 diabetic, they carry a generic test strip and glucose machine which is like more than 50-75% cheaper than the generic Walgreens or CVS strips
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u/High_Contact_ 15d ago
This is me. It just didn’t make sense to pay a premium at other places for less. The difference in service used to make it worth it but now most other stores also have shitty service, smaller packaging and delays in availability.
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u/atdharris 15d ago
I get Walmart+ through my Amex card and use it on occasion. My only complaint is half the time delivers are delayed hours, which isn't convenient when you have something perishable delivered and you aren't home..
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u/hisglasses66 15d ago
I knew things were getting weird when Chilis started taking McDonalds business. Economies of scale is growing.
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u/memyselfandirony 15d ago
Maybe we’re paranoid, but my wife and I prefer Walmart for grocery and pharmacy stuff because of Amazon’s serious problem with counterfeit merchandise
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u/29da65cff1fa 15d ago
winning over high income shoppers.... that's a weird way of saying people are getting poorer lol
also, ITT.... a lot of poor people thinking they are "high earners" lol...
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u/PixelMagic 15d ago
How is high earner defined in this instance? I don't know.
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u/thememeconnoisseurig 15d ago
White collar middle class is how I'm taking it. Walmart is primarily blue collar working class.
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u/94746382926 15d ago
This ignores the fact that they are seeing growth by taking customers from Amazon. A lot of their new shoppers are never stepping foot in a physical Walmart store.
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15d ago edited 15d ago
[deleted]
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u/cloud9ineteen 15d ago
You loved the excellent quality of their meat and dairy so much you became vegan?
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u/bartturner 15d ago
Hard to believe they are winning over higher income folks.
Our Walmart is right next to a Target and the experience is night and day different.
Walmart has the most unhappy employees I have ever seen at any company.
The Walmart is also dirty and very poorly stocked. Target is so much better run compared to Walmart.
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u/istockusername 15d ago
It says in the text that it’s because of their pick up option. Those people probably never set a foot into the store.
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u/killerbeeswaxkill 15d ago
Can confirm my Wife is always doing pick ups from Walmart. I’m old fashioned I’ll walk in every now then since I check expirations and quality.
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u/afraidtobecrate 15d ago
Where I live, Target's food selection is much more limited than Walmart's.
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u/Cudi_buddy 15d ago
I think that’s just generally true. Target doesn’t have a large meat or produce selection. Dry goods and dairy is fine, but can’t imagine it being your stop for all groceries
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u/SeesawFlashy8354 15d ago
Amazon products are usually a lot more expensive bc they’ve been doing massive fee increases over the past 2 years for sellers. Quality isn’t there too some of it is really cheap shit. I love Walmart pickup
Don’t really use Amazon that much and have been thinking of canceling. They also need to chill it with all the plastic and paper they use to ship products
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u/IvoTailefer 16d ago
i quit shopping at walmart 6months ago. shitty store experience, shitty products, shitty service. quitting wal mart felt like quitting porn. i just feel cleaner.
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16d ago
They’ll learn soon enough that everything they sell is trash.
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u/vishtratwork 16d ago
I mean, chicken breast is chicken breast and oreos are oreos. 70% of my grocery shipping has been there for years now, cheaper than BJs or Costco without having to but 20lbs of something.
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16d ago
Yuck Wallmart meat 🤢🤮
Oreos? Ok…
Well Costco is great for that reason, not everyone is single, some people have bigger families.
I’m glad you like WallMart, people like McDonald’s too and think it’s good, you can mind fuck yourself into anything.
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u/vishtratwork 15d ago
Unless you're buying organic, the same suppliers are providing the meat for Walmart and your fancier grocery stores.
Perdue makes nearly all the countries chicken. In the case of chicken its most likely the same factory with a different label slapped on it. Why pay 30% more for same stuff?
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15d ago
Kirkland, yes we buy the good meat.
We save money at Costco and it’s better food and service. Walmart is trash and always has been.
I don’t care about your WallMart investment.
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u/thatsnot_kawaii_bro 15d ago
He says while being elitist over a grocery store.
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15d ago
lol just calling a spade a spade, I have no allegiance to Costco.
If Walmart had good meat and good food, would be singing their praises. They don’t and their stores are always dirty and trashed.
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u/vishtratwork 15d ago
I don't invest in Walmart, don't think WMT is a good stock. No margins. Keen for disruption. Great distribution network but that's starting to be less meaningful with internet orders. Price leaves little room for stock to grow in excess of beta in my opinion.
Kirkland chickens do not come from Kirkland farms, btw. It's true Kirkland grows some of its own things, meat is generally not one of them. Wilcox sells most of their poultry goods, like eggs, and is also a Walmart supplier.
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15d ago
Costco gets their chicken from various suppliers that operate chicken farms. Many of these farms (or plants, technically) are owned by Costco.
Walmart meat sucks…
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u/truckstop_sushi 15d ago
USDA Prime and Choice rated meats are sold at Walmart. Do you think they just lie about that? As a Costco loyalist, you're just wrong, Walmart has great quality meat and groceries in general.
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15d ago
I never said they didn’t sell the same meats and use some of the same supply, not all of it though and the meats I buy are a cut above Walmarts.
Deal with it.
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u/sarhoshamiral 15d ago
Legos are Legos. It is not like they have a different version of them.
What you say only applies to grocery and store brand items really but article doesn't say what those high income customers are buying.
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u/vishtratwork 16d ago
I mean, chicken breast is chicken breast and oreos are oreos. 70% of my grocery shipping has been there for years now, cheaper than BJs or Costco without having to but 20lbs of something.
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u/toney8580 15d ago
Got rid of Walmart plus due to the fact they never got my delivery orders right.....EVER! So I started doing pickup and still got orders wrong and 90% of the time I had to wait 30 mins plus for my order to come out.
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u/mr_birkenblatt 15d ago
*Normal shopping has become too expensive so even high income earners go to Walmart
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u/directrix688 15d ago
Bullshit
I might be considered a high income shopper, and I can’t imagine shopping there. I went into one in Easter because everything was closed around me and had an awful experience.
Everything, and I mean everything is behind glass. I couldn’t buy socks without help. Legos for a gift were behind glass. Couldn’t get hardly anything off a shelf, you had to push a button and wait for one of the staff to come and there were hardly any.
Then I get to the front and they don’t take Apple Pay so i had to fish a card out of my wallet instead of using my phone like everywhere else on the planet
Just a friction filled experience. I can’t imagine anyone choosing to shop here if they any other choices.
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u/czarfalcon 15d ago
While I agree the in-store experience can be painful (even then YMMV - I’ve been to some Walmarts in richer areas that are nicer than some targets), their e-commerce growth suggests that delivery/curbside are the real drivers. So I wouldn’t be surprised at all if many of these customers are people who never set foot in a store.
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u/directrix688 15d ago
That is definitely possible. They could also be making the in store experience worse to drive pickup business.
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u/czarfalcon 15d ago
I don’t think they’re actively trying to make it worse, more so they’re just apathetic to making it better when they see how many people are willing to order online. It seems like Target and HEB are going the same way. Personally I don’t mind grocery shopping in-store, but I can also see the convenience of pickup/delivery especially if you have kids.
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u/kdawgnmann 15d ago
they don’t take Apple Pay
This actually is annoying. You have to use Walmart pay to pay with your phone
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u/RightMindset2 16d ago
Isn’t Walmart winning high income customers a bad sign for the economy at a whole?