Consumer Discretionary

Ed Lin Companies can show confidence in their prospects in many ways, but $1 billion of stock repurchases certainly trumps a “cautiously optimistic” outlook. Among retailers, that’s a breathtaking amount of buyback activity. That’s how much Walmart laid out to buy back shares in the fiscal second quarter ended July 26. What’s even more impressive is that the retailer didn’t significantly curb buying as the share price rose. Walmart paid $363 million in May for 5.8 million shares, an average price of $62.19 each, according to a form the company filed with the Securities and Exchange Commission. Then it paid $292 million in June for 4.4 million shares, an average price of $67.12 each, and paid $339 million in July for 4.9 million shares, an average price per share of $69.66. At the end of July, Walmart had $14.5 billion allocated for share repurchases. Walmart stock has only climbed since

Walmart’s (WMT) Q2 results confirmed its ability to perform well across various economic conditions by taking advantage of special events, UBS said in a note emailed Friday. July was a tough month for retailers, but Walmart saw strong sales during Independence Day holiday and a good response to the start of back-to-school season. The company saw a 26% increase in overall advertising revenue, primarily driven by a 30% rise in the US Connect segment. The company’s global e-commerce segment had a 21% growth, the investment firm said. Walmart’s cost of delivery fell by 40% year over year, attributed to improved density and a rise in fees for expedited shipping options, UBS analysts noted. Walmart’s outlook for Q3 includes a modest increase in sales, with expectations of continued momentum in back-to-school sales and a conservative H2 guidance for operating income growth of 4% to 5%. UBS retained the buy rating for

Walmart is one of the most mentioned companies in the U.S. across all news items in the past 12 hours, according to Factiva data. Walmart posted strong second-quarter sales and higher profits, and executives said they don’t see signs of fraying demand. Walmart said that its U.S. comparable sales, which measures both stores and e-commerce, rose 4.2% in the quarter, a faster pace than in the previous two quarters. Executives said shoppers are gravitating to deals as well as the convenience of online order pickup and delivery, which led to customer gains, especially among higher-income shoppers. Dow Jones & Co. owns Factiva.

Walmart indicates that it will accelerate price rollbacks as cost inflation eases, which is a clear signal that consumer price inflation is moderating, says David Silverman, senior director of Fitch Ratings. The retail giant’s robust 2Q results amid a choppy spending climate suggests some stabilization for its customer base, although that growth likely came more from share gains, Silverman says. Walmart’s price competitiveness has allowed it to pick up market share from competitors, though its omnichannel and supply chain enhancements are helping too, Silverman says.