Walmart expects improved second-quarter sales

Walmart Inc. (WMT.N) reported on Monday that its margins and online sales would improve in the second quarter as the largest U.S. retail company received government stimulus checks from American shoppers. Most customers purchased higher-priced products such as sneakers and toys along with daily essentials.

“Unlike other retailers, we believe Walmart took most of the pain in Q1, limiting the Q2 impact. One question is how well it will perform compared to big-box competitors like Costco Wholesale Corp (COST.O) and Target (TGT.N) that have gained momentum since the start of the pandemic,” Credit Suisse’s Analyst Seth Sigman stated last week.

According to Information Resources Inc. (IRI), the majority of stimulus funds went to housing, savings, and grocery bills.

“The way we see consumers right now is they’re spending on what they need to spend on – a lot less dining, a lot more eating at home. All of those trends favor Walmart,” Huntington Private Bank’s Portfolio Manager Randy Hare said.

Most retailers in the United States, including Walmart, encountered a surge in sales of items like electronics and clothes amid the second quarter.

“Walmart has done a lot right in recent years. It’s improved execution & successfully changed the narrative of its story from that of a mature brick & mortar retailer to being a viable No. 2 in e-commerce,” UBS Group’s Equities Analyst Michael Lasser declared in a statement.