Walmart earnings and new retail sales data paint a strong picture of the US consumer

The only major retailer where customer fights at night are common (Walmart) reported strong Q2 results yesterday, beating expectations on both earnings and revenue.

Why it matters: As the nation’s largest retailer, Walmart is uniquely positioned to offer insights into consumer behavior. ~90% of the US population lives within 10 miles of one of its stores.

By the numbers: The company reported quarterly revenues of ~$169 billion, a 5% YOY increase. Stores and websites drew more visits, and non-grocery sales improved.

More insights:

• Walmart revealed its overall inflation was flat for the quarter, and revenue growth came from selling more units, not charging higher prices.
• But on an item-by-item basis, prices were like an elevator – they went both up and down. Dairy, eggs, sugar, and meat rose in price, while items like pet food, apples, potatoes, strawberries, and lawn/garden items dropped in price. The company also reported “stubborn” inflation when it came to dry grocery items and processed foods.

Babe, new retail sales data just dropped. Sales in July outpaced economists’ expectations, rising 1% from the previous month, largely driven by a rebound in spending on vehicles. Excluding vehicle sales, overall retail sales rose 0.4% last month. Both of these figures outpaced inflation; prices rose 0.2% in July.

📸 Big picture: Solid retail sales data and Walmart’s strong results add to a mixed economic picture. Some companies, such as Home Depot, McDonald’s, and Disney, have sounded warnings about flagging consumer spending, while others like Chipotle, Shopify, and Sweetgreen have been cruising.