Walmart keeps it simple…
Low prices.
It can buy at such volume that it’s able to offer the same goods as every other big box retailer at a much lower price…
And unlike Costco – you don’t have to BUY in volume to save money – you can just get exactly what you need without taking a hit to your pocket.
You’d think that this kind of price game wouldn’t be that sustainable – but Walmart has found a way to do it with the long game in mind – not just a boost to its sales.
It always seems like they’re chasing the dragon though – trying to get ahead of the prices so they don’t drag Walmart down.
It’s not the business model most Fortune 500 CEOs would adopt – but it has worked for it…
And worked for it well.
How well?
Let’s just say when you take a look at its newest earnings report – you’ll wonder if this is what ol’ Sam Walton had in mind.
Let’s take a peek behind the blue curtain, shall we?
Yes, Walmart (WMT) has surprised Wall Street once again…
As it just announced its quarterly sales and profit, and guess what?
I’m sure by now – you know that it did better than expected!
Now, before you start thinking this is just another dry financial update – stick around – there’s a twist that might surprise you… and it’s involving some unexpected shoppers.
So, what’s the big deal?
Walmart’s “comparable sales” (that’s sales from stores open at least a year) jumped by 3.9% last quarter.
This is making headlines because analysts only predicted a 3.4% increase – so Walmart’s performance was a pleasant surprise.
But here’s the kicker: it’s not just their loyal customers who are swiping their cards more often…
High-income earners – likely tired of splurging and looking for bargains – are now starting to shop at Walmart.
This influx of new shoppers has bolstered Walmart’s confidence – prompting the company to raise its expectations for the entire year…
And investors, always quick to jump on good news, sent Walmart’s stock up in response.
Of course – I don’t know or like what this could mean for the economy as a whole…
If the “rich folk” have been forced to start shopping at Walmart – it begs the question: how bad are things out there?
But that’s not the only place Walmart made some headway – after taking a page out of e-commerce heavyweight, Amazon’s (AMZN) play book – Walmart took things digital.
Bezo’s baby has always been a triple threat with its quality, affordability and speedy delivery…
And now, Walmart, not one to be left behind – has borrowed a page from Amazon’s playbook by expanding its online product range and speeding up delivery times.
This has been big for them, as Walmart’s ecommerce revenue soared by 22% compared to the same time last year…
And just like Amazon – Walmart has developed a lucrative advertising business – which saw a 24% increase last quarter.
So, not only is Walmart keeping pace with Amazon – but it’s also innovating in ways that boost its bottom line.
But as I said, what does this say for the economy?
Large corporations like Walmart are often seen as indicators of the US economy’s health…
Their performance can reflect the spending habits of millions of Americans. However, Walmart’s upbeat report was dampened by bad news from another economic bellwether.
Deere & Co. (DE) the world’s largest farm equipment maker – slashed its annual profit forecast for the second time this year. Falling crop prices have led to lower demand for tractors – hinting that some parts of the US economy are slowing down.
This mixed economic signal could push the Federal Reserve to consider cutting interest rates to stimulate growth.
All this is interesting, but it doesn’t answer the question: is Walmart a profit opportunity?
The answer?
Maybe. It all comes down to what the numbers and data say. Hype is one thing – but hard data is another – which is why the GorillaTrades trading matrix was designed to read data and numbers only.
We don’t care about hype or momentum – we only care about the numbers.
And if you want to know whether or not Walmart has the data to back up its price surge – I urge you to become a member of GorillaTrades today.
Our system has given our members the chance to make a LOT of money – and we’d love for you to be along for the next ride.
However, we understand that “joining” isn’t everybody’s cup of tea – so we understand if you want to continue to go it alone…
Just know we’re here if you need us.
Until next time, keep your eyes on Walmart – it could be a big indicator of things to come.
“You can’t just keep doing what works one time, everything around you is changing. To succeed, stay out in front of change.” – Sam Walton