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Walmart stores expected to post high shopper traffic amid deepening inflation pain -Breaking


© Reuters. FILE PHOTO – A worker and a customer are seen in masks outside a Walmart Store, North Brunswick, New Jersey. U.S., July 20, 2020. REUTERS/Eduardo Munoz


Arriana McLymore & Aishwarya Veugopal

NEW YORK (Reuters) – Walmart (NYSE) Inc expects to report steady growth in gross margins, revenue, and earnings when it releases its first quarter results Tuesday. Price conscious customers, who feel the pressure of constant inflation, will increase their visits to the low cost retailer. data revealed that Walmart’s monthly average increase in visits to its stores has been 4.9% since 2022, as compared with 2021. This is despite the supply chain problems and higher fuel prices, which have caused shoppers to shop less.

Analysts are also optimistic about Walmart’s potential to diversify its revenues through advertising, and keep prices down when compared to other struggling competitors.

Joseph Feldman, a Telsey Advisory analyst said that Walmart’s pricing remains the lowest. He also stated that Walmart has done a great job keeping the prices down to keep up with competition. This gives the customer the most value in an inflationary world.

Guggenheim analysts wrote Monday that Walmart is the “top choice” in inflationary times.

Walmart’s top and bottom line performance will be maintained in an evolving environment of pandemics, without regard to consumer spending.

Already, investors are stepping up. Walmart stock has risen by 2% over the past year, compared to the 16% drop.

Groceries prices rose 10.8% in April. It was the highest year-over-year increase since 1980. The cost of one gallon of gasoline fell 6.1%. But it still jumped nearly 44% compared to a year earlier.

Brett Briggs, Walmart Chief Financial Officer, stated in March that inflation was a concern and that increasing fuel costs would lead to consolidation of shopping trips.

There will be fewer trips. Briggs stated that you will see fewer trips if your baskets are larger.

Refinitiv projects that the Bentonville-based retailer will achieve gross margins in the fourth quarter of 24.55%, an increase from 24.43% the prior quarter. Revenues are expected to rise 0.4%, or $138.883 million. Estimated earnings per share of $1.48 are down from $1.69 in the previous year.

Chuck Grom, analyst for Gordon Haskett said that Walmart will see increased trip consolidation, a healthier price gap to other national chains and an acceleration in inflation trends.

To challenge Amazon Prime (NASDAQ:), the company is aiming to increase its $12.99 per-month Walmart Plus membership. Walmart Plus launched in September 2020 and offers gas discounts as well as delivery. However, it is struggling to compete with Amazon.

Bizrate cited an eMarketer report that showed only 15% of Americans used Walmart’s Plus service, while 62% used Amazon Prime.