One day after rival Target reported stronger sales after lowering prices on thousands of items, Walmart announced Thursday that its sales also jumped in the fiscal second quarter.
The company reported a 23% jump in global e-commerce sales, while comparable sales in the U.S. rose 2.6%.
“Our business is strong,” Chief Financial Officer John David Rainey told CNBC. “We feel really good about the progress we’re making.”
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Tariff refunds will help lower prices
Walmart is eligible for nearly $3 billion in tariff refunds following the Supreme Court’s ruling against President Donald Trump’s tariffs.
Rainey said Walmart is eligible for nearly $3 billion in refunds and plans to use the money to lower prices for customers. He said customers should begin seeing the impact of those lower prices in the third quarter.
Economic headwinds
The planned price cuts also come as higher gas and food costs continue to squeeze household budgets.
Gas prices are also running nearly a dollar higher than a year ago, according to AAA, after rising sharply since the start of the U.S. war with Iran. The average price per gallon was $4.10 nationally on Thursday, nearly a dollar more than one year ago when it was $3.13/gallon.
The U.S. Bureau of Labor Statistics recently pegged July inflation at 3.4%.
“We would love to be able to bring prices down more and see less pressure on their wallets,” Rainey said.
He said Walmart expects to lower prices across several categories, including beef.
Target’s price cuts boost sales
On Wednesday, Target said it had cut prices on more than 10,000 products over the past year and plans additional reductions through the end of the year.
Target has also refreshed its product selection and redesigned parts of its stores.
Customer traffic increased, helping push comparable sales up 3.8% in the quarter.
“Seeing our growth fueled by traffic is especially encouraging,” Target CEO Michael Fiddelke said.
Target has focused much of its turnaround on categories including beauty, health and wellness, food, women’s style and home goods.
Target Chief Merchandising Officer Cara Sylvester said in an earnings call, “In some categories, we’re pleased with our progress and we’re seeing meaningful momentum.”
Target also expects to benefit from tariff refunds and says it plans to “invest in price” if it receives roughly $2 billion back.
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