How WMT Generates $161 Billion in Sales in a Single Quarter

Walmart is in the midst of a brand renaissance.

Its shares are up +30% YTD as it buckles down on what it does best: groceries, ecommerce, and deals. Even its happiness levels have improved, now trailing once-esteemed Target (TGT) by only 3 points.

Results speak for themselves -- last quarter, the company logged $161 billion in sales.

What's next?

Based on consumer activity, it looks like the train will keep rolling in Walmart's favor, at least in the near-term.

App usage popped in July, capturing tailwinds from the Amazon-invented summer shopping holiday: Prime Day.

Walmart app users increased +13% YoY and Sam's Club app users increased +10% YoY in the month of July.

Web visits mirror this strength -- consumers are hunting and finding value.

Last quarter WMT stock hit all-time highs as earnings beat, the company continued to attract high-income trade-down shoppers, and e-commerce sales grew (+22% YoY).

Groceries are a major driver of purchases, accounting for 60% of WMT sales in the last fiscal year. The dicrepancy between the price of cooking at home and buying food at fast-food chains or restaurants is helping to boost this demand.

Walmart typically outperforms in an inflationary environment because it sells essentials (like groceries) and consumers feel like their ticket comes out lower vs. other retailers.

For reference, Walmart's revenue growth last quarter was powered by more transactions and trips/visits/orders -- avg. ticket size was flat.

Bottom Line

We're bullish heading into earnings, based on strong expected ecommerce growth and a continued trade-down effect from high-income shoppers. Amazon's prime day in July looks to have benefitted Walmart as well. But we note the bar is extremely high. Shares are trading less than $2 off highs.