"Recently, however, doubts have quieted, and Walmart's stock price has soared. The company's reputation as the low-priced leader at a time when consumers are increasingly cash-strapped is one reason. Another is Walmart's decision to take a page out of Amazon's book, investing heavily in e-commerce to create a robust delivery system and third-party marketplace. Those moves are fueling significant growth, including during the second quarter, according to CEO Doug McMillion."
"Walmart ( WMT) gets about 60% of its sales from essentials like groceries, and that puts it in perfect position to capture consumer spending as it shifts from discretionary to non-discretionary purchases because of a weaker economy. While GDP growth remains robust, economic activity is primarily driven by the massive buildout of AI infrastructure, rather than increased household spending. Job hiring has decelerated from 2024, according to payroll processing giant ADP."
Walmart's stock has risen after prior challenges from e-commerce and big-box rivals quieted. The company leverages low prices and heavy investment in e-commerce, including delivery systems and a third-party marketplace, to drive growth. Global e-commerce sales grew 25% with multiple segments exceeding 20%, led by Walmart U.S. and Sam's Club U.S. at 26%. About 60% of sales come from essentials like groceries, positioning Walmart to benefit as consumers shift from discretionary to non-discretionary purchases amid a weaker labor market and slowing household spending growth.
Read at TheStreet
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