BENTONVILLE, AR — Walmart reported fourth-quarter earnings Thursday that beat on revenue, operating income, and the unmistakable sound of a household earning $140,000 a year cracking open a 48-count box of frozen taquitos for the first time.
U.S. comparable sales rose 4.6%, with executives noting that "higher-income households" — the company’s preferred euphemism for the people who used to make fun of the company — drove the majority of new market share gains. Grocery did the heavy lifting. Eggs alone did the bench press.
On the call from Bentonville, CFO John David Rainey described the consumer as "value-seeking," which is a CFO’s way of saying "panicked." The earnings deck, rendered in the same flat corporate blue Walmart has used since approximately the Carter administration, contained the phrase "trip frequency" seventeen times and the word "discretionary" exactly once, in a footnote.
The Sam’s Club division noted that its $4.98 rotisserie chicken continues to function as a leading economic indicator, having now been recession-priced through four recessions, two soft landings, and one event the Fed has not yet officially named.
Across town in Minneapolis, Target executives reportedly spent the morning staring at the same comp-sales chart and asking, again, why their version of a value-seeking household mostly involves a $34 boucle throw pillow. A spokesperson said the company is "leaning into" categories Walmart has not yet decided to crush.
At a Walmart on the outskirts of Rogers, Arkansas, a third-shift manager named Dale restocking the frozen aisle said he could not comment on macro trends but had personally noticed "a lot more Patagonia vests" in checkout line 14 since around Thanksgiving. He estimated the average vest at "around two hundred bucks, which is dumb." He was, at the time, eating a microwaved breakfast sandwich over the trash can in the break room.
Walmart raised full-year guidance and authorized an additional $20 billion in share buybacks, because at some point the only thing left to do with $681 billion in annual revenue is hand it back to the people who already have most of it. Executive compensation, the company noted, will be reviewed by a committee of executives.
The stock rose 3% in pre-market trading and then settled, the way consumers eventually do.