Walmart attracts budget-conscious customers, remains strong in Q2 

Walmart reported strong second-quarter sales results as the retailer’s low-price model continues to attract budget-conscious consumers in a tough economic environment, the Associated Press reports. The nation’s largest retailer boosted its annual outlook again, sending shares up as much as 2% before the opening bell Thursday.

Walmart earned $7.89 billion, or $2.92 per share, for the three-month period that ended July 31. Adjusted results were $1.84 per share, or 13 cents better than Wall Street had expected, according to a survey of industry analysts by FactSet. It was also up from last year’s quarterly profit of $5.15 billion. Sales rose nearly 6% to $161.63 billion, a shade better than expected.

Walmart is in a stronger position than many other retailers since more than 50% of its annual sales come from the nondiscretionary category food. At Target, food is only 21% of annual sales. Walmart also has said, however, that shoppers remain cautious, trading down to private label goods from more expensive national brands.

Walmart slashed the price of its online subscription shopping service in half for those on government assistance to keep those customers. It said the Walmart+ service will cost $49 a year, or $6.47 per month for those on Medicaid, Social Security, the Supplemental Nutrition Assistance Program (commonly known as food stamps), or other programs. Its regular membership costs $98 annually.

The company said today it expects sales to be up 3% and anticipates $1.45 per share to $1.50 per share for the current quarter. For the year, it now projects sales to be up 4–4.5% and shares to be $6.36 per share to $6.46 per share.