Higher-income shoppers help boost Walmart sales

STORY: After spooking markets last month by cutting its annual profit forecast, Walmart gave a slightly brighter outlook Tuesday as discounted items and lower gas prices helped lure back shoppers.

The retail behemoth beat expectations for quarterly sales, sending shares up, along with those of rivals Target, Costco and Best Buy.

The company’s stock has fallen this year, with Walmart last month warning that consumers were pulling back on discretionary purchases at a far greater pace than feared as soaring inflation hit their spending power.

That forced Walmart to make steep price cuts on items such as apparel to try to reduce its more than $61 billion worth of inventory at the end of the first quarter.

Walmart’s Chief Financial Officer on Tuesday said the company had cleared most of its summer seasonal inventory, but still had work to do in reducing its stock of electronics, home and apparel, which he termed "problem areas."

Back-to-school shopping gave Walmart’s sales a boost at the end of July, but many parents opted for cheaper school supplies instead of clothing.

Walmart’s CEO added that surging inflation also drove many mid-to-high income customers to Walmart, mainly to its online business - but that they too stuck to lower-priced items like groceries over higher-margin general merchandise.