Walmart Stock Surges as Other Retailers Crumble

Investing

Published: December 26, 2024 8:15 am

This year will be considered the “Year of Walmart.” The stocks of other retailers have struggled as Walmart Inc. (NYSE: WMT) shares have jumped 77% higher. It is a testament to its size, novel services, and clever senior management.

24/7 Wall St. Key Points:

While the stocks of other retailers have struggled this year, Walmart Inc. (NYSE: WMT) shares have soared.
Weak consumer spending has not damaged all national retailers.
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Leader of the Pack

Walmart truck — Not hurt by weak consumer spending.

So far this year, the shares of other large retailers have fallen. This included Target, Albertson’s, Walgreens, Dollar Tree, and Kohl’s. Target Corp. (NYSE: TGT) is an example of the industry’s troubles, despite its position as the number two big-box retailer beyond Walmart. Its revenue barely budged, up 1.1% to $26.7 billion, in the most recently reported quarter. Net income cratered 12% to $854 million. Its guidance worried investors even more. It forecast a lackluster holiday season. Its stock is down 7% this year, while the S&P 500 is 25% higher.

Kohl’s Corp. (NYSE: KSS) stock dropped 21% when it announced its most recent earnings and is now down nearly 50% for the year. It said net sales will be down as much as 7% for its fiscal year, which ends in January. That reflects pessimism about the holiday season. In its most recent quarter, revenue dropped almost 9% to $3.5 billion. Earnings fell from $0.52 per share in the same quarter a year ago to $0.20.

It would be easy to say that weak consumer spending damaged all national retailers. However, given Walmart’s size, that case is hard to make. In the most recent quarter, revenue rose almost 6% to $170 billion. Adjusted per-share earnings rose 14% to $.58. U.S. revenue rose 5% to $115 billion. Operating income for the region was higher by 9% to $5.4 billion.

Walmart is a good proxy for consumers nationwide. Ninety percent of the U.S. population lives within 10 miles of a Walmart store. It has over 4,700 locations in America. And its global e-commerce revenue was up 27%. To a large extent, this is because of the ability to order online and pick up items at stores.

Walmart’s stock is up so much that, despite its size, it is swimming against the tide.

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