Walmart’s stock reached a record high on Friday as investors placed bets that the low-cost retailer’s reputation for a bargain will enable it to outperform competitors in the retail space and attract customers all through the holiday season.
Earlier in the day, the stock of the big-box retailer peaked at $166.30. Since Walmart started trading on the New York Stock Exchange in August 1972, that is the highest.
Despite American customers cutting back on discretionary expenditures like new clothes, flat-screen TVs, and other items, Walmart, which is well-known for its expansive stores and inexpensive pricing, has produced impressive results over the past year. Grocery is a category that consumers require, even during times of inflation or economic downturn, and accounts for over half of the company’s annual revenue. This particular grocer is the biggest in the nation.
Despite weaker sales and cautious outlooks from competitors like Macy’s and Target, Walmart has been able to increase foot traffic thanks to that business.
Sticky inflation has turned into a chance for Walmart to draw in new or less frequent customers to its internet and physical locations, especially in areas like food and household necessities. Chief Financial Officer John David Rainey stated in talks with CNBC that the company has seen an increase in the number of grocery consumers from households earning over $100,000 in recent quarters.
When those customers visit Walmart’s physical locations and website, they observe the efforts the company has made to improve the customer experience in order to compete with more sophisticated, technologically savvy competitors like Target and Amazon. The business has introduced and grown cutting-edge apparel brands. It updated both its app and website. Over the next two years, it plans to invest over $9 billion to update and modernize its stores across the nation. And via its third-party marketplace, it has expanded the selection of products and upscale brands on its website.
Additionally, Walmart has resisted another retail business tendency. It has posted double-digit e-commerce improvements for its U.S. company over the last two quarters, however, while the Covid pandemic advantages fade away and most companies report reductions in online sales.
In an August interview with CNBC, Rainey stated that while Walmart’s discounts may draw in people, the company also hopes to outperform rivals and keep those customers by streamlining the purchasing process. He stated that curbside pickup and delivery have been the company’s main drivers of e-commerce growth.
It demonstrates that Walmart’s value offer extends far beyond its low costs and good quality. Nowadays, it’s convenient,” Rainey remarked. “Therefore, we’re heavily relying on that and, to be honest, both facets of this aspect of our business.”
Some investors have noticed that the company is performing better than many of its competitors. Walmart’s stock has increased by over 16% so far this year. That beats the S&P 500’s returns of over 13% and the retail-focused ETF, the XRT, which gained about 3%, during the same period.
Walmart is expected to release its third-quarter fiscal results on November 16.