Wealthy shoppers weren’t enough to save Walmart’s quarter

Walmart is seeing higher sales thanks to wealthier customers shopping online, but what has investors selling the stock?

Transcript

00:00Wal-Mart is sounding a cautious tone on the U.S. consumer, and that is sending shivers

00:05throughout the retail sector.

00:06The world's largest retailer issued a fiscal year profit forecast that came in below expectations.

00:13The company's sales growth outlook came in at the low end of forecasts as well.

00:17The outlook suggests Wal-Mart is expecting a consumer pullback later this year as inflation

00:23remains relatively high and consumer lending rates not likely to fall much further.

00:29The key Wal-Mart consumer is already under pressure as high food bills, rising gasoline

00:34prices and everyday living costs, such as rent, eat away at their budgets.

00:39And now there's a threat prices could go even higher with broad-based tariffs threatened

00:44on all imports.

00:46Even higher-income shoppers have been flocking to Wal-Mart for refuge.

00:49The retailer said it continues to see more six-figure shoppers come through the doors,

00:54which is helping to offset any weakness coming from lower-to-middle-income consumers.

01:00That's a winning formula, at least for the quarter just reported.

01:04Wal-Mart says the average in-store bill at checkout for the fourth quarter, which includes

01:09the holiday shopping season, rose 2 percent.

01:12Online sales in the U.S. jumped 20 percent during the same period.

01:16Company-wide, sales came in better than expected at nearly $181 billion.

01:22That's a jump of more than 4 percent from a year ago.

01:25But as Wal-Mart's forecast suggests, the retailer isn't sure it will see numbers like those

01:31in the near future.

01:34Turning to markets now on this Thursday, the Wal-Mart news is weighing on retail stocks

01:37and that is putting pressure on the broader market.

01:40Investors are also digesting the latest economic news.

01:43Weekly jobs claims rose more than expected last week but remain in a tight range, which

01:49suggests the labor market remains stuck in neutral.

01:53That'll do it for your daily briefing from the New York Stock Exchange.

01:56I'm Conway Gittins with the Street.