Wal-Mart (WMT) handily beat same-store sales expectations, posting numbers that would have been fine even without low expectations. Boosted by (temporary) stimulus checks, the company also provided an encouraging outlook for June. WMT continues to benefit at the expense of “premium” retailers, as consumers trade down.
May U.S. same-stores sales, excluding fuel, were up 3.9%, beating the consensus of a 1.6% increase. WMT sees June U.S. same-store sales, excluding fuel, to rise between 2% and 4%. Home goods also saw their first comparable store sales increase in more than two years.
Could we finally be seeing those stimulus checks at work? Wal-Mart CEO Eduardo Castro-Wright believes so and credits the checks as well as Wal-Mart’s “price leadership” for the beat. If people aren’t paying off their debt with these checks, or simply saving them, Wal-Mart seems the likely destination for the government handout.