Last week, major retailers in the U.S. reported earnings. By listening to these earnings calls and reading the reports, we can observe some developing trends among U.S. consumers.
Overall, executives at these companies believe that consumers are starting to tighten their spending and are focusing on essential items such as food and groceries. These companies also noticed a decline in sales of non-essential or discretionary items like home goods, electronics, and apparel. As the low-cost provider, Walmart experienced a boost in sales compared to this time last year. Consumers are seeking more value for their dollars and may not have excess cash at this time.
Walmart surprised on the upside, with sales up 7.2% compared to this time last year. According to Walmart executives, this does not imply that consumers have a surplus of cash. They observed an increase in sales of grocery items and essentials, but sales remained flat for discretionary items like home goods, electronics, and apparel. During tough times, Walmart sees fewer customers purchasing these nonessential items. The preference for grocery items, coupled with a few equity losses, led to a 19% drop in profit for the quarter. Walmart is known for its low costs and attracts consumers looking to save money during difficult times. Walmart raised its profit and sales expectations for the remainder of the year.
Target’s sales remained flat over the last quarter compared to one year ago. Target observed more shoppers spending on groceries but a decline in discretionary items. The net earnings of Target fell by 5.8% to $950 million in the quarter, influenced by higher labor costs, inflation, and shrinkage (the loss of merchandise due to theft or other issues). Lower freight costs have benefited all retailers this year.
Sales at Home Depot were down 4.2% for the most recent quarter, and its annual sales are likely to decline for the first time since 2009. Home Depot experienced a surge in sales and profits as consumers were confined to their homes during the pandemic and invested their time and money in home improvements.
To schedule a call to review your financial plan and investments Click Here
SUBSCRIBE TO THE FINANCIAL INCLINE
This content not reviewed by FINRA
Incline Wealth Advisors, LLC, its owners, officers, directors, employees, subsidiaries, service providers, content providers and third-party affiliates (referred to as “IWA”) do not offer the sale of securities or other investments. None of the information provided is intended as investment, tax, accounting or legal advice, as an offer or solicitation of an offer to buy or sell, or as an endorsement, of any company, security, fund, or other securities or non-securities offering.
The information should not be relied upon for purposes of transacting securities or other investments. Your use of the information is at your sole risk. The content is provided ‘as is’ and without warranties, either expressed or implied. IWA does not promise or guarantee any income or particular result from your use of the information contained herein. Under no circumstances will Incline Wealth Advisors, LLC be liable for any loss or damage caused by your reliance on the information contained herein.
It is your responsibility to evaluate any information, opinion, or other content contained. Please seek the advice of professionals regarding the evaluation of any specific content. Information on this website should not be considered a solicitation to buy, an offer to sell, or a recommendation of any security in any jurisdiction where such offer, solicitation, or recommendation would be unlawful or unauthorized. The information on this site is provided “AS IS” and without warranties of any kind either express or implied. To the fullest extent permissible pursuant to applicable laws, Incline Wealth Advisors, LLC(referred to as “IWA”) disclaims all warranties, express or implied, including, but not limited to, implied warranties of merchantability, non-infringement, and suitability for a particular purpose.
IWA does not warrant that the information will be free from error. None of the information provided on this website is intended as investment, tax, accounting or legal advice, as an offer or solicitation of an offer to buy or sell, or as an endorsement of any company, security, fund, or other securities or non-securities offering. The information should not be relied upon for purposes of transacting securities or other investments. Your use of the information is at your sole risk. Under no circumstances shall IWA be liable for any direct, indirect, special or consequential damages that result from the use of, or the inability to use, the materials in this site, even if IWA or a IWA authorized representative has been advised of the possibility of such damages.
In no event shall Incline Wealth Advisors, LLC have any liability to you for damages, losses, and causes of action for accessing this site.
