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High-income shoppers drove another strong quarter for Walmart. “Households earning more than $100,000 made up 75% of our share gains,” president and CEO Doug McMillon said during an earnings call.
Walmart reported 5.5% revenue growth and 5.3% US same-store sales growth year over-year. It raised its guidance for the thirdtime this year, increasing its net sales outlook to 4.8%–5.1% growth and its EPS projections to $2.42–$2.47.
Customers are responding positively to Walmart’s efforts to become an “omni” retailer offering in-store purchases, curbside pickup, or delivery, CFO John David Rainey said during the earnings call. Though US in-store sales grew in Q3, curbside and delivery sales outpaced them, McMillon said. Rainey did note in a CNBC interview that the retailer may have to raise some prices if President-elect Trump’s proposed tariffs are implemented.
Higher-income consumers seem to appreciate being able to buy from Walmart without, well, actually setting foot in a Walmart store.
“Those that have more discretionary income and want to save time are liking what we’re doing with both pickup and delivery,” McMillon said. More than 30% of delivery customers choose to pay extra fees so they can receive their orders in under three hours, Rainey said. And pickup and delivery customers are more likely than in-store customers to buy premium grocery items such as gluten-free products, grass-fed beef, and organic produce, he noted.
Walmart’s online marketplace sales grew 42% over the quarter, Rainey said, and the marketplace now contains almost 700 million SKUs. The broad assortment allows the retailer to “appeal to more people and appeal to higher income levels,” McMillon said. However, though Walmart’s e-commerce segment was up 27% globally for the quarter, it has yet to become profitable, Rainey told CNBC.