Walmart stock jumps on earnings as upper middle class shoppers flock to its budget groceries

Shares in Walmart (WMT) jumped over 3% to a new high on Tuesday after the retail giant beat third-quarter earnings estimates and raised its full-year guidance, crediting upper-middle-income customers for 75% of the company’s gains.

Walmart reported same-store sales are growing by 5.5%, a good sign for investors as Walmart heads into the busy holiday season at a time when many other retailers are struggling.

“We had a strong quarter, continuing our momentum,” Walmart CEO Doug McMillon said in an earnings statement. “Our associates are working hard to save people time and money and to transform our business. Across markets, we continue to grow, and our newer businesses helped profits grow faster than sales while we worked to lower prices.”

Walmart’s bread and butter are low- and middle-income consumers who shop there for the low prices and convenience. But as they buy less due to inflation and higher prices, Walmart has been increasingly focusing on a new segment: those making more than $100,000 a year. Those wealthier customers are increasingly turning to Walmart for groceries, among other staples, as they continue to spend but seek cheaper alternatives, according to CNN.

Walmart executives also said deliveries are helping boost its bottom line. The Bentonville, Arkansas-based retailer is going after Amazon’s wealthier demographic and recently launched same-day pharmacy delivery, taking on struggling pharmacy chains like CVS, Rite Aid, and Walgreens.

As Fast Company previously reported, by the end of January 2025, Walmart’s Pharmacy Delivery is expected to reach tens of millions of customers for both new prescriptions and medication refills in 49 states. Walmart is hoping shoppers will add groceries and other products to those deliveries as it builds up its home delivery business, which it’s betting on for long-term increased growth.