“This suggests higher income households are changing behaviors by trading down to discount channels like WMT,” Gutman concluded. Morgan Stanley data indicates higher income household penetration rates have increased 2% in the course of the quarter. He expects grocery, auto parts, and pet categories will also show notable growth in the quarter given their more non-discretionary characteristics.Įlsewhere, Gutman expects the retailer’s second quarter report to reflect greater penetration in higher income households. This trend suggests that Walmart’s ( NYSE: WMT) “aggressive markdown strategy is working,” Gutman wrote. He added that while sales in discretionary categories broadly declined, apparel sales appeared to bounce back from April. In quarter four of 2021, Walmarts inventory turnover was 7.93 turns. Published by Statista Research Department, Mar 24, 2022. “We don't know how much excess inventory WMT needs to work through in 2H, and margins could still see a drag from markdowns – but it shouldn't linger into next year based on our math.” Walmart: inventory turnover ratio globally 2018-2021. Keep scrolling for 12 of the top deals were currently shopping, and be sure to scope out the thousands of additional sales for yourself.

We saw this just last month with Target, and are now spotting exceptionally high discounts across all of Walmarts categories. “WMT's gross margin contraction in Q2 (anywhere from 60%-80%) was likely driven by markdowns,” he told clients in a note on Friday. Excess inventory means slashed prices on bestselling products. These suppliers are willing to make less profit on a per. Thanks to economies of scale, products get cheaper with a bigger product order. Walmart is likely to complete its inventory clearing actions by the close of the year, according to Morgan Stanley analyst Simeon Gutman. Walmart buys so much stuff that it can get major discounts.

Walmart inventory