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Highlights:
- Some retail stocks tend to do well during times of economic downturn.
- Walmart Inc. (WMT) reported revenue of US$141.6 billion in Q1 FY-23.
- Kroger (KR) reported sales of US$44.6 billion in the first quarter of fiscal 2022.
The retail and consumer sectors are often expected to note a rise in demand amid economic downturns like inflation as more people tend to spend less outside and cook their own meals. Hence, investors looking for robust retail stocks amid the ongoing market uncertainties can look at the stocks of Walmart Inc. (NYSE: WMT) and The Kroger Company (NYSE: KR) for the long term.
Let's look at these retail players in detail.
Walmart Inc. (NYSE: WMT)
The multinational retail giant reported net sales of US$96.9 billion in Q1 FY23, relative to US$93.2 billion in Q1 FY22. WMT’s consolidated operating income was US$5.3 billion in Q1 FY23, while its international net sales were US$23.8 billion.
However, Walmart’s total revenue in the first quarter of fiscal 2023 was US$141.6 billion, up 2.4 per cent from that of US$138.3 in Q1 FY22.
WMT stock has plummeted 1.7 per cent to US$121.98 as of July 26, 2022. On a YTD basis, it plunged by 8.73 per cent.
The Kroger Company (NYSE: KR)
Kroger posted sales of US$44.6 billion in the first quarter of fiscal 2022, up 3.8 per cent from that of US$41.3 billion in the year-ago quarter, excluding fuel.
Kroger also repurchased US$665 million of its shares in the latest quarter and launched 239 new, seasonal brands items, apart from fresh products, to boost summer cooking.
KR stock jumped 1.15 per cent year-to-date (YTD) but has gone down by 5.5 per cent over the last month. However, if we look at the trajectory in the last one year, KR stock has risen 14.96 per cent.
Bottom line
US markets can continue to see volatility as the US Fed Reserve fights to quash the four-decade high inflation with tight monetary policies and rate hikes. Amid all these, investors can look for companies that are likely to provide some safety net to their portfolios.