Walmart’s Strategy Pays Off as Higher-Income Shoppers Drive Growth

As inflation eases and consumers remain focused on finding bargains, Walmart is reaping the rewards. Walmart’s shares jumped 7% on Thursday following the release of strong second-quarter earnings. The company’s performance was bolstered by an influx of higher-income shoppers, as well as growth in its advertising and e-commerce divisions.

In its latest earnings report, Walmart noted that its value and convenience offerings continue to appeal to customers across all income levels, with the most significant gains coming from upper-income households.

Earlier in March, Walmart announced plans to remodel approximately 650 stores in an effort to attract wealthier customers. These upgrades include enhanced lighting, a greater emphasis on mannequins, fewer product displays, and a focus on high-end items.

Following the earnings announcement, Walmart’s stock surged in early trading, reaching around $73 per share. The Arkansas-based retailer exceeded Wall Street’s expectations, reporting second-quarter revenue of $169.3 billion, or about $0.67 per share. Analysts had predicted $168.6 billion in revenue, or roughly $0.65 per share, according to FactSet.

Walmart, the largest retailer in the U.S., also raised its full-year guidance, citing steady consumer demand. However, the company cautioned that it expected consumer demand to be slightly below Wall Street’s forecasts. For fiscal 2025, Walmart anticipates sales growth between 3.75% and 4.75%, an increase from its previous projection of 3% to 4%.

The earnings report comes on the heels of a significant stock gain in June when Walmart shares reached an all-time high after JPMorgan analysts upgraded their rating, highlighting the retailer’s strong balance of defensive and offensive strategies in a challenging consumer spending environment.

Walmart’s CEO, Doug McMillon, pointed out that the company’s newer ventures, such as its online marketplace, advertising unit, and membership program, are also contributing to its profitability.

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