One Retailer’s Stock Jumped 7% and Could Go Higher Next Quarter

On Thursday, Walmart (WMT) stock climbed by 7%, partly on the news that inflation is not as bad as expected.

The retail giant attributes its gains not to inflation, though, but to strong sales revenue and happy customers. A statement from Walmart CFO John David Rainey reported that customers come to Walmart for the value in a tight economy.

The American retailer reported $161.5 billion in sales, which is above the anticipated figure and helped boost earnings per share. Those earnings were also better than anticipated.

The company’s CEO Dog McMillon said to investors that the results the company is seeing is not solely due to inflation. He says that the company is growing and that there are more transaction counts and an increase in market share. In other words, Walmart is taking over more of the retail space across the country and drawing more customers into its stores from other retailers.  

It helps that Walmart is a fully stocked grocery store as well as a conventional retailer, and their prices are famously low. The value is increasingly important to consumers who are trapped in a high inflation economy.

Walmart Stock Expected to Increase

The forecast for Walmart is strong for the next quarter. Sales from the previous quarter increased by 3.9% from last year. Sam’s Club sales increased by 4.4%, and the company expects that to all increase for the next quarter, especially with membership income up by 13%.

Walmart is an important institution in times of high inflation, and even though the US CPI report showed that inflation may be cooling, that will not be enough to cool customers on shopping at the discount retailer. More inflation data from FOMC member Waller today could move the needle on stocks and economic sentiment as well.

Walmart is also cutting hundreds of jobs in attempts to increase profit margins. Some of its employees have been asked to move to its headquarters in Arkansas.