Walmart Keeps Fan-Favorite Status as Shoppers Tighten Purse Strings

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Thanks to a scarcity of government data on how much (or little) consumers are spending, Wall Street is analyzing this quarter’s retail earnings reports even more closely than usual. And those numbers have made one thing clear: Walmart is still the retail king.

The country’s largest retailer not only beat earnings and revenue estimates during its third quarter but also bumped its full-year sales and earnings outlook higher. That’s the second quarter in a row Walmart has increased its forecast for the year, despite the continued pressure tariffs and inflation have put on retailers and their customers. In fact, those skyrocketing prices that consumers have had to contend with for everything from groceries to gas appear to be what’s giving Walmart a boost.

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Slashing Outlooks Left and Right 

“The large percentage of US consumers remain thrifty and are seeking promotions,” said analyst Zachary Warring of independent research firm CFRA. “Low- and middle-income consumers remain pressured and prices are top of mind.”

Walmart, whose reputation is built on low prices, is perfectly positioned to benefit. There are currently around 7,400 active price rollbacks in US stores, and since the beginning of the year, 2,000 price rollbacks have resulted in permanently lower price tags, CEO Doug McMillon said on a call with analysts.

“Walmart is better insulated than just about anybody, given the value proposition that we have,” Chief Financial Officer John David Rainey added.

Not all big-box retailers are heading into the holiday season as confidently as Walmart:

• Bath & Body Works reported third-quarter earnings per share of 35 cents and revenue of $1.59 billion, below the 39 cents and $1.63 billion that analysts were expecting. The company also lowered its fourth-quarter and full-year guidance, “reflecting current business trends and continuation of recent macro consumer pressures.”

• Earlier this week, Home Depot fell short of Wall Street’s earnings expectations for the third quarter in a row and Target reported a drop in quarterly sales. Both companies cut their outlooks for the year. Lowe’s quarterly sales increased year over year, but it also slashed its full-year profit outlook due to “ongoing uncertainty in the macroeconomic environment.”

Santa’s Still Coming: Despite concerns ahead of the busiest season for retailers, Americans are ready to open their wallets. The National Retail Federation expects retail sales in November and December to increase 3.7% to 4.2% from last year and surpass $1 trillion for the first time ever.

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