Walmart rights the ship before Black Friday

As Black Friday rears its head, the world’s largest retailer is showing signs that the doom and gloom facing the retail sector this year may have been (at least a little) overhyped. 

What happened: Walmart’s (+6.54%) latest earnings report beat expectations to the tune of ~US$152.8 billion in revenue, while e-commerce sales in Canada rebounded in a big way—shooting up 3.5% compared to a 9% decline in the previous quarter. 

Why it matters: Walmart is considered a bellwether for retailers, and its performance shows where and how consumers spend their money. Last quarter, it seems like tighter budgets drove shoppers to suburban shopping centres to load up on lower-priced groceries.

  • General bargain hunting also worked in Walmart’s favour, as high-income shoppers (who typically spend their dollars at ritzier locales) turned to the humble box store.   

Yes, but: Things are far from perfect. Walmart still lost US$1.8 billion, is holding 13% more inventory than last year, and is giving a conservative outlook for the holiday season.

What’s next: Target, Macy’s, The Gap, and Lowe’s are scheduled to release earnings this week, which will give us a clearer picture of how the rest of the sector is faring.