Figures released on Thursday by Walmart calmed investors worried the US economy could fall into a recession.
Sales at many of Walmart’s US stores increased by 2.8% during second quarter 2019 compared with the same quarter last year, signaling continued positive outlook.
In the last fiscal year, Walmart reported the highest annual growth rate in a decade. It generated $514.4 billion in revenue in the fiscal year ending Jan. 31, 2019, up from $500.3 billion the previous year.
Shares of Walmart rose about 5% in early trading Thursday August 15, 2019.
The latest results and an impressive increase in July retail sales reassured jittery investors that consumers remain confident and still shop at Walmart.
“We continue to have momentum, especially in the U.S.,” CEO Doug McMillon said in a statement. “We’re favorably positioned as we leverage our expansive Supercenter network to deliver a robust omnichannel experience. More than ever, we’re innovating across the business.”
“Our customers’ economic health remains solid and our competitive position is strong,” Walmart CFO Brett Biggs said on Thursday.
Walmart has grown online sales in recent years as many of its competitors such as Macy’s (M) and JCPenney (JCP) struggle to catch up with shopping changes. Consumer habits are shifting towards online shopping as mall foot traffic declines. This is affecting many big retailers but numbers released by Walmart shows the situation is different for them.
Macy’s has lost nearly 60% of its stock market value this year. Like Macy’s and Sears, JCPenney has long closed many stores.
Walmart has focused its investments on offering low-and-middle income customers cheaper and more convenient ways to buy groceries, the bulk of its business. It has also invested a lot of money into sprucing up stores and raising wages for workers.
At the same time, the Arkansas based retailer has redesigned its website and bought several high-end brands — including Bonobos and Modcloth — to attract wealthier shoppers.
To compete against Amazon (AMZN), Walmart has expanded curbside grocery pickup from stores and introduced one-day shipping to 75% of US customers.
“Combining physical stores with digital options is the future of retail,” Cowen analyst Oliver Chen said in a note to clients Thursday. Walmart “shines here.”