Walmart CEO Doug McMillon said Tuesday that its customers “want to get out and shop.” The company expects that spending spree to continue, as U.S. consumers re-emerge into the world and spend money they stashed away during the pandemic.
Store traffic rose in April — the first increase in a year. When customers shopped, they tended to buy more, too. Average ticket rose by 9.5% in the first quarter, even as overall transactions fell by about 3%.
Chief Financial Officer Brett Biggs said purchases have begun to reflect the reopening economy. He said items related to personal care, celebration and travel have picked up and contributed to the company's strong first-quarter earnings. Some merchandise, such as teeth whitener and new clothes, is back on the shopping list.
“You're seeing customers definitely get out and spend again,” he said on the company's earnings call. “Spending rates are good. Income rates are good. The savings rates are actually still almost at an all-time high, which would lead you to believe there is going to be some pent-up demand as we get to the back half of the year.”
Walmart's first-quarter earnings beat Wall Street's expectations, as it picked up market share in grocery and saw e-commerce sales in the U.S. grow by 37%. It also raised its outlook for the second quarter and fiscal year, due to consumers' spending patterns.
Biggs said it is difficult to tease out the impact of stimulus checks, which contributed to first-quarter sales. He said it is also challenging to predict the back half of the year, as Covid-19 cases remain high in some of Walmart's markets like India.
However, he said he feels more optimistic about the months ahead as he sees what's happening around the country.
McMillon said the retailer has begun to imagine the back-to-school season. It is also thinking about how families may celebrate holidays like Halloween, Thanksgiving and Christmas — traditions and gatherings that were largely disrupted by the pandemic a year ago.
“We get really excited about the potential of that,” he said.
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