This Customer Trend Helped Save Walmart's Quarter, but Does It Spell Trouble for the Year Ahead?

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Walmart (NYSE: WMT) Is one of the world’s largest and most powerful retailers. It is now quite well, the sale of the same store in 2025 is growing by 4.6%.

In this issue there is a wrinkle, but as it supports customers who usually do not go to Walmart. That’s why it’s a problem.

Walmart is a retailer, but it doesn’t even start touching a huge scale of the company $ 790 billion Market capA number of the dominant force in general retail sale, shares, club stores and online retail fields.

The company generally generated $ 462 billion in income in 2025. It’s hard to sink how important it is Retail sectorA number

Man and a child looking at the food box in the grocery store. — Image source: Getty Images.

This is stated that Walmart’s bread and butter always offer goods at attractive prices. The company’s Taglines is “low-long prices”.

Everyone considers a deal, but the company’s main customer is low from the bottom of the socio-economic spectrum. It’s not typical of something bad, but it is important to remember that Walmart is targeted to top-income households.

Right now Walmart is doing well, it’s financially talking. In the fourth quarter of 2025, sales increased by 5% per year in the US market, the company’s most important region. The quarter included all important holiday season, so it’s quite impressive. The sales of the same store (COMMS) increased a strong 4.6%, as well as 2.8% increase in traffic and growth of 1.8% growth.

In fact, more people were shopping in Walmart and spent more every time they visited. That’s exactly what you want to hear if you are a retail investor. At the same time, 4.7% and 4.5% growth has been on sale all year round. So Fisc5025 was a good year that ended with a strong post. Just something wrong.

Explaining the success of the US business, the management said: “Share a profit [came] Mainly from upper-income households. ” Thus, it was an important part of that success from customers who were trading in the company’s stores. This speaks of two problems.

First, if the upper-income households choose to shop at Walmart, it suggests that the economy is not bigger for consumers. Thus, the main client of the chain can fight right now, the fact that the growth of the trade customers can be atmospheric. Although it is positive that this has been beneficial for this non-main group at the moment, it is not a good sign today for the chain’s faces for the business fund.

Second, the main customers of Walmart are not actually in the category of upper income. These are medium and low-income buyers who need low prices every day every day. Customers with upper-income are most likely to trade when they feel more financial.

This means that the benefit of the upper income households will most likely be temporary. And if retail sales are mostly coming from the upper income households, as it manages, what will be when those customers leave.

The focus of the upper income households can feel like a small problem to complain. Indeed, Walmart is doing well, and it is still good news that it can serve these traders.

But the shares are trading within 10% of all its high levels. And the coefficients of price sales and prices are beyond their five-year medium. The profit of the dividend, with a miserable 1%, is close to the low end of the historical range. Stocks look expensive.

You can argue that because it goes well now, it deserves Premium Price. Quite fair, but it also shows that very good news is the price in stock. If something is terrible, such as upper income buyers passing higher finishes, Walmart’s results can look less attractive.

And the shares that the price of premium could fall quickly. If the assessment is important to you, you will probably want to avoid Walmart right now.

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RUBEN GREGG BREWER does not have any of the specified shares. Motley Fool has positions and offers Walmart. Motley Fool has Discovery Policy:A number

This customer trend helped save Walmart’s quarter, but is it progressing for the coming year? originally published by Motley Fool

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