Walmart Ups its Guidance for the Year

Walmart is cleaning up, and we’re not talking about aisle spills.

During its third-quarter earnings call on Tuesday, the big box retail giant announced that it’s raising its outlook for the year, thanks in part to a rocking start to the holiday shopping season. Still, the optimism comes with more than a few caveats — the types that paint a pretty clear picture about the state of the economy.

Thanksgiving Comes Early

The holiday season is literally shorter this year (Thanksgiving is later than usual, meaning there are five fewer days between then and Christmas than usual). Walmart, unsurprisingly, had a plan, kicking off holiday shopping discounts a few weeks earlier than usual. On its call with analysts, Walmart said it was enough to build some momentum heading into the final frame of the year — giving it reason to bump annual net sales growth guidance up from 3.75% to 4.75% to a range of 4.8% to 5.1%. Shares of Walmart jumped 3% on the news.

Still, American consumers largely remain wary. The third-quarter brought a slowdown in growth of the number of transactions, even as Walmart competes in an industry-wide race to appeal to price-conscious customers. In the meantime, Walmart’s positive quarter was driven in part by increasingly catering to a very specific (read: comfortable) kind of shopper:

• While total transactions were down, the value of individual transactions rose in the quarter. Walmart said that was because shoppers from households with annual incomes of at least $100,000 are increasingly flocking to its stores.
• Meanwhile, the e-commerce unit’s streak of $2 billion in monthly store-based deliveries stretched to a twelfth month, with customers paying a premium on 30% of purchases to get them more quickly.

Overall, consolidated revenue rose to nearly $170 billion, up 5.5% year-over-year, while global operating income spiked more than 8% year-over-year to $6.7 billion.

Get Lowe: Lowe’s, which also reported its latest earnings results Tuesday, didn’t have it quite so easy. The quarter marked the eighth straight period of declining sales as inflation — and high interest rates — prompted consumers to put off big spending on home projects. Shares were down almost 5%. Target’s results, posted on Wednesday, failed to live up to Wall Street’s expectations, precipitating a 20% drop in its share price in pre-market trading.