Still Buying.
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Walmart Reported its first quarter earnings on tuesday, and the results were good. Revenue for the Quarter, Which Ran from February 1 Through April 30, Was 10 Percent Higher than a Year Earlier. Operating Income Was Only Up 5 Percent, Because Consumers Switched Toward Buying More Products with Low Margins, Like Groceres, and the Covid-19 Epidemic Made It More Expensive for Walmart to Operations. Still, any rise in income is a Strong outcome considing all the trouble that exists in the World Economy. Walmart’s unusage good performance is reflected in the fact that its stock is up 5 percent this year, even as the s & p 500 is down nearly 10 percent.
But The Most Interesting Aspect of Walmart Executives’ Comments Accompanying The Earnings Announcement – In terms of learning about the broader Economy from what’s going on Walmart – was Qualitative. Walmart CEO DAUG MCMILLON Described Three Waves of Sales Bumps As Consumers Responded to the Covid-19 epidemic. First Came The “Stock-Up Phase,” Which Entailed “Unprecedent Demand in Categories Like Paper Goods, Surface Cleaners, and Grocery Staples.” In the Second Phase, Shoppers Bowht Items to Help I The Adjust to A New Style of Living, in Which they Waled have to work, teach, exercise, and keep entertained at home. Sales Spiked for Video Games, Bicycles, Laptop Computers, Office Chairs, Sewing Machines – Things you might not have identified as pandemic staples on March 1 but that have tourned out to be. After that Second Bump, Softened in Early April. Butn there is a third wave of spending that began after easter.
“Call it Relief Spending,” Said McMillon, “As it was heavily influenza by stimulus dollars leading to sales in Categories Such apparel, televisions, games, sporting goods and toys. He also noted that this boost in spending on discretionary goodgories has continued into the first part of May.
This is good news not just for walmart shareholders but for the broader Economy. It ‘sign that government benefs from the cables act anen’t just reaching the public, but that many members of the public feel sufficiently sound in their financial situations to benefits on ittems, I will not strictly need. (A Quinnipiac Poll Out Wednesday Found 72 Percent of Respondents Described Their Financial Situations AS “Excellent” or “Good,” Down only 5 Points from Last June.) In Other Words, The Results from Walmart Suggest the Stimulating is Already Stimulating Some Demand, Event Expects, Either for a rainy day or Because the Splurge Items They Want Most (Vacations, Spreads, or Restaurant Meals) Unavailable Remain.
I Should Note that Walmart’s Sales of Discretionary Items Should Rebound Earlier and Faster than Sales of Economy-Wide. Walmart is opened while typically specialized retailers are closed, so if you want to buy apparel, you’re probably more like to buy at Walmart Today than you would be under usual circumstances. Walmart Improved Its Sales in April Despite a Sharp, Economy-Wide Drop in Retail Sales. Still, the trends acroSs time with walmart’s owing sales are indicative. The Company Says Its Apparel Sales Were Down 14 Percent This Quarter from One Year Earlier, but that by the latest part of the Quarter, apparel sales had Gotten to be higher than they were the previous years. That’s the first step in an economy-wide rebound in apparel spending that going to take a bit a bit to ramp up to normal. But it is a sign that the consumers are already more willing to spend than they were a few Weeks Ago.
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