Dividend Stocks

Walmart Stock Just Hit an All-Time High. What Drove the Gains?

Walmart (NYSE:WMT) stock surged more than 7% today to a fresh all-time high on the back of a very strong fiscal Q1 earnings report. The market is eating up the results and investors appear to believe there are more good times ahead for the discount retailer.

Walmart beat on both the top and bottom line, reporting an uptick in spending from more affluent consumers. Additionally, strong e-commerce growth has bolstered the thesis that Walmart is much more than a brick-and-mortar play. Its U.S. business saw 22% growth in e-commerce sales in Q1. To experts, this is a sign that WMT stock is a recession-resistant investment.

Additional strength was reported from the company’s advertising division (24% growth), which helped drive margins higher. Its third-party marketplace also contributed to the results.

Walmart Stock Surges Following Blowout Earnings Report

Walmart reported $161.5 billion in revenue for its fiscal first quarter, which handily beat analyst expectations of $159.5 billion.

Impressively, earnings beat by an even wider margin, with the company reporting 60 cents per share of adjusted earnings, versus consensus calls for 52 cents. Again, higher margins were driven by a more affluent consumer base during the quarter.

Overall, these numbers do paint a rosy picture for Walmart. The company has appeared to get its inventory in line and is appealing to the right set of consumers. If there’s more trade-down in the economy, Walmart could be a key beneficiary. There’s simply little in this report to knock, and it’s easy to understand why the market is helping Walmart stock hit fresh highs today.

On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Chris MacDonald’s love for investing led him to pursue an MBA in Finance and take on a number of management roles in corporate finance and venture capital over the past 15 years. His experience as a financial analyst in the past, coupled with his fervor for finding undervalued growth opportunities, contribute to his conservative, long-term investing perspective.