Walmart earnings takeaways and what it signals about consumer

Walmart (WMT) has raised its full-year guidance as the retail giant continues to gain market share across all income groups in the US. Yahoo Finance Senior Reporter Brooke DiPalma joins Wealth! to break down the company's latest earnings and where it saw the most growth.

DiPalma notes that upper-income households account for the majority of market share gains at Walmart, and it is continuing to grow sales among low and middle-income households. Most shoppers head to Walmart for groceries, as well as for prescription drugs. Consumers are also slowly returning to buying general merchandise and discretionary goods. For the first time in 11 quarters, the company saw positive inflection in general merchandise, and consumers flocked to its e-commerce segment, Walmart Marketplace.

Catch the full interview with Walmart Chief Financial Officer John David Rainey from Thursday morning.

For more expert insight and the latest market action, click here to watch this full episode of Wealth!

This post was written by Melanie Riehl

Video Transcript

Well, Walmart raised its full year outlook as its consumers remain consistent with how they're shopping and it continues to gain market share across all income groups.

Here in the US.

The namesake Walmart business saw a 4.2% increase in sales here to discuss what drove that increase.

We've got Brooke depalma Hero.

Good morning, Brad.

That's right.

All income cohorts continuing to shop in America's biggest retailer, upper income households continue to account for the majority of market share gains at Wal Mart.

But the company said it's also growing sales and share among middle and lower income households too.

So, what are these, all these people going to shop at Wal Mart for, well, mostly groceries.

And that's an ongoing trend that we've seen in recent years.

They're also heading to Walmart for prescription drugs and slowly returning to buying general merchandise like those discretionary goods.

But groceries, that's a big business for Walmart sales in the category were a mid single digits driven by consumers going there more frequently, the food shop and buying more when they do.

Now, this private label brand that introduced this past, I'd say June, July, it's called Better goods it launched in the quarter and that brand offers healthier higher quality products.

I get this a $5 price point and it seems like consumers really leaned into that idea.

They really like to this higher quality item for a cheaper price.

And so we brought saw private brand penetration jumped 30 basis points in the quarter.

Now, health and wellness also a growing business for Walmart that jumped high single digits.

Now get this executive said the sales of G LP one drugs are contributing to the sales growth in that category.

And for the first time in 11 quarters, the company saw positive inflection in the general merchandise category, something that consumers have been pulling back from, but they did see consumers flock to online that E commerce Walmart marketplace, something that's growing for furniture and sporting goods.

And earlier today CFO John David paint a picture of what consumers its consumers are looking for and how it's addressing those needs.

In an interview with Yahoo Finance, we know that they're looking for value and that they're, they're still their dollars are stretched.

And so they're focusing on those things that uh that are providing value for them.

They're being choiceful when they buy the larger ticket items.

And there's also a little bit of a difference if you look at economic data between the cost of food at home versus food away.

And certainly that plays to our strengths and we want to continue to provide that value for our customers.

Rainy.

Went on to say that back to school is off to a good start with strength in the stationary category.

And typically that's a good indicator for how the holiday season will perform.

Brooke while we have you quickly, how, how big is that discrepancy between food away from home and, and groceries?

Yeah.

According to the CP I print that we got on Wednesday food away from home is up, 4% was up 4% in the month of July food at home.

That grocery cost was up roughly 1%.

And so we're seeing big players like mcdonald's and Starbucks, KFC Burger King introduced value and promotion to get customers back in store.

But Walmart pulling those customers who are looking to save a dime by shopping for groceries and cooking more at home.

All right.

Yahoo.

Finance zone, Brooke Dipalma tracking all things tick.

A simple WMT Walmart.

Appreciate it, bro.