Latest news with #Walmart+
Miami Herald
6 days ago
- Business
- Miami Herald
Popular local Trader Joe's rival suddenly closing after 40 years
While many analysts and outlets like to discuss how difficult it is to be a retailer, it's pretty hard to be a customer, too. These days, customers are faced with a laundry list of challenges to overcome. Related: Famous retail chain closing more stores amidst chaotic new change Rising prices present many of us with difficult decisions at the checkout counter: do we set a budget before buying our groceries? Do we save up for something we'd ordinarily splurge on? And should we leave a couple of items behind until prices finally cool down? As the cost of living continues to rise, many customers have reported feeling pinched paying for just the essentials - like housing, fuel, and food - and will instead curb purchases on nonessential goods to make up the difference. This, in turn, means bad news for retailers. Unless a store is taking advantage of rising costs and is price-gouging customers, rising costs mean less business. And as fewer customers shop for fewer total items, profits typically dwindle. Some retailers have been able to pivot as prices rise and customer behaviors change. Walmart, for instance, has thrown lots of time and resources into its e-commerce service, Walmart+, which now acts as a bustling profit center. But pure play grocery stores have a more complicated challenge. More closings: Popular Mexican chain closing all restaurants, no bankruptcyIconic mall chain shuttering more stores foreverMajor gym closing multiple locations after franchisee bankruptcyAfter Chapter 11 bankruptcy, beloved retailer closes all stores Unless they are massive corporate giants, many local grocers and markets must keep their brick-and-mortar businesses open and undercut competition to attract or maintain customers. But this is a thankless job. Most grocery stores run on razor-thin profit margins. Even during the best of times, supermarkets bring in between 1-3% profit margins, and many of their most popular draws, like produce, chicken, eggs, and milk, are loss leaders. This means that if grocery stores want to turn a profit, they must undercut everybody else and hope that the sheer volume of customers coming through their doors to shop will make up for those losses. Unfortunately for smaller, independent grocers, a race to the bottom is nearly an impossible proposition. That's because many corporate giants have negotiating power with suppliers, allowing them to bring prices down as much as possible without sacrificing too much profit. This makes it hard to go up against the likes of Kroger and Walmart, so local businesses suffer. And now, Robert's Food Center, a market-style grocery store located in Madison, Conn., is closing its doors permanently after four decades in business. Related: Home Depot local rival closing permanently after 120 years Similar to Trader Joe's, Robert's Food Center was known to the community as a place to get high-quality baked goods, prepared meals, and local or artisanal products not typically offered by larger chains. Robert's Food Center had been in an ongoing lease negotiation dispute with its landlord, North Madison Associates. After months of unsuccessful negotiations and maintenance issues, owner Zach Fusco made the hard decision to shutter the store. "After months of contentious negotiations with the landlord, we were unable to reach an agreement on outstanding maintenance issues on the leased structure, which was causing major operational issues for the store," Fusco told Progressive Grocer. "We worked extremely hard to come to an amicable agreement with the landlord but were unable to do so. I sad to be closing a store with a 42-year family legacy. We look forward to continuing to operate the Brookside Market location [in nearby Glastonbury] and work toward another location in the hopefully not so distant future." The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
Yahoo
27-05-2025
- Business
- Yahoo
Target Stock Looks Cheap but It May Be a Bargain Today for a Much Better Reason
Target's stock has dropped to cheap levels because of slumping sales and worries over higher costs. Investors could be under-appreciating this one opportunity that's already boosting profits for Target's top peers in the retail space. 10 stocks we like better than Target › The words "cheap" and "bargain" might look like synonyms. But as I'm using them, the difference has everything to do with the future. Well-know retailer Target (NYSE: TGT) trades at just 11 times its earnings, which is about 60% cheaper than the S&P 500, which trades at about 28 times earnings, according to YCharts. But it's not a good idea to invest in a stock simply because it looks cheap. If Target's profits drop further, this cheap stock likely isn't a bargain. In other words, Target stock is "cheap" when compared to the valuation of the S&P 500, meaning it's merely less expensive right now. By contrast, the term "bargain" causes me to consider the quality of the business, not just the price. But it's precisely the quality of Target's business that's in question right now. Consider that Target's revenue peaked about two years ago, and management expects another low-single-digit decline here in 2025. Moreover, its earnings per share (EPS) peaked three years ago. And this year, management is guiding for EPS of $8 to $10, which is a wide range, reflecting a lot of uncertainty with the business. The situation is complicated yet my assertion is simple: If Target materially grows its earnings in coming years, then the current price is a bargain. Consider that it looks cheap today based on the currently suppressed earnings. Therefore, things would get quite interesting if earnings went up from here. And believe it or not, Target has low-hanging fruit to increase profitability and most investors don't even know about it. The largest brick-and-mortar retail chain in the world is Walmart (NYSE: WMT) -- everyone knows that it sells physical products in physical stores. What investors might not know is that Walmart has a growing digital business that's boosting its profitability. Walmart's digital business has multiple components. It has an e-commerce website, which enables high-margin third-party sales in addition to first-party sales. It sells memberships to its subscription product Walmart+. And it leverages this digital scale into a skyrocketing advertising business. In the first quarter of its fiscal 2026, for example, revenue for Walmart's advertising business jumped 50% year over year. According to CFO John Rainey, about 25% of Walmart's profits right now come from its memberships and its advertising business. Keep in mind that this digital push for the company is relatively recent. To already constitute one-quarter of profits after just a few years is huge. This is the playbook that massive brick-and-mortar businesses are using right now to boost profitability. Walmart is a good example. But businesses such as Costco and Kroger are doing it too. Target is later to the digital game but it's low-hanging fruit to boost profitability. Its subscription service Target Circle 360 launched about one year ago and is helping boost the digital business. In the first quarter of 2025, comparable sales in its stores were down about 6% year over year whereas its digital comparable sales were up about 5%. The digital business is one of the few things growing for Target, and it has multiple avenues for this. First, it has a retail media business called Roundel. This is a way for Target to take its data and partner with brands to deliver personalized advertising. Second, it has Target Plus, which allows third-party merchants to sell on Target's e-commerce platform. Again, this is no different from what Walmart or even Amazon does. So it's not a revolutionary idea. But it's an idea that's proven to boost revenue and profits. Unfortunately, Target's digital efforts are so young that its shareholders don't have perfect visibility into these numbers right now. But the little that can be known is promising. Target's first-quarter advertising revenue was up 25% year over year to $163 million. Compared to overall Q1 net sales of $24 billion, that's still small. But it has to start somewhere. Moreover, management says that both Roundel and Target Plus enjoyed "double-digit growth" in Q1. That could mean 10% or it could mean 99% -- investors can't be sure. But either way, double-digit growth is encouraging. To be clear, Target is facing headwinds when it comes to sales. And it's grappling with potentially higher expenses in light of new import tariffs. So there are things that can drag its profits down further. That said, other prominent retailers have succeeded by investing in digital growth. Target is now investing in digital growth and experiencing a measure of success. Therefore, it's not far-fetched to believe it can boost its earnings in this way. And if it does, the stock is an absolute bargain worth buying today. Before you buy stock in Target, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Target wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $639,271!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $804,688!* Now, it's worth noting Stock Advisor's total average return is 957% — a market-crushing outperformance compared to 167% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 19, 2025 John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Jon Quast has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon, Costco Wholesale, Target, and Walmart. The Motley Fool recommends Kroger. The Motley Fool has a disclosure policy. Target Stock Looks Cheap but It May Be a Bargain Today for a Much Better Reason was originally published by The Motley Fool
Fast Company
14-05-2025
- Business
- Fast Company
Walmart's earnings could offer clues about how retail is weathering the tariff storm
Results from Walmart, a bellwether for the U.S. retail industry, will offer proof on Thursday why the Arkansas behemoth is best placed to navigate the uncertainty from the Trump administration's tariffs. Walmart is among a handful of large companies that has not either pulled or slashed its forecast. The company last month reaffirmed its annual forecast, saying 'nothing in the current environment changes its strategy'. Since the announcement was made minutes before U.S. imposed a 145% tariff on China – Walmart's largest supplier – investors will watch for any adjustment to the outlook and whether it absorbs any tariff-related costs or passes them on to customers. The world's largest retailer has promised to keep prices low to keep its price advantage over competitors. its fiercest rival, is also 'maniacally focused' on lower prices and has encouraged sellers to move more inventory to the U.S. before tariffs take effect. 'Many consumers are prioritizing saving money and stretching their dollar a little bit further,' Jefferies analyst Corey Tarlowe said. 'They're prioritizing what they need over what they want. So they're trading into value-oriented retailers…that to me paints a very clear picture that's conducive to success for Walmart.' With the U.S. and China pausing trade escalations on Monday, retailers including Walmart have had to deal with a month of elevated tariffs. Many stopped shipments from China and reached into their inventories to stock shelves. Rival Target, unlike Walmart, expects annual sales to be flat and tariffs to weigh on its results. It reports on May 21. Walmart said in February it expects profit growth to slow this year even as sales rise. It forecast adjusted earnings per share for the fiscal year ending January 2026 in the range of $2.50 to $2.60, and sales growth of 3% to 4%. At that time, Trump had imposed 10% tariffs on goods from China and 25% on goods from Mexico and Canada. 'Walmart should be able to effectively manage the increase in tariffs, given its strong global sourcing operation, healthy vendor relationships, and defensive product mix,' Telsey Advisory Group analyst Joseph Feldman said. 'Sales should be pretty solid and it feels like investors feel confident that Walmart will execute and operate in this environment.' Its U.S. e-commerce business will be in focus as the company has said the division will achieve profitability for the first time in the first quarter. The business has seen double-digit growth for 11 straight quarters in the U.S. and clocked 16% growth globally in the fourth quarter. It accounts for just under a fifth of Walmart's annual revenue. The company's paid membership program, Walmart+, is of interest for investors who want to see if it is taking customers away from rivals Amazon and Costco. Walmart's stock has been on a tear over the past year, rising 60% to take its market value above $700 billion, and outperforming six of the so-called Magnificent Seven tech companies that led the market rally in 2023 and 2024. Only Tesla has performed better. For the first quarter, analysts polled by LSEG expect Walmart net sales to increase 2.7% to $165.88 billion and net income to fall 9% to $4.64 billion. '(Walmart's) more favorable positioning relative to the rest of retail will probably become even more evident as the year unfolds, when the operating environment could become much more challenging,' UBS analysts said in a research note. —Ananya Mariam Rajesh, Reuters
Yahoo
14-05-2025
- Business
- Yahoo
Loyalty programs drive grocery e-commerce sales
This story was originally published on Grocery Dive. To receive daily news and insights, subscribe to our free daily Grocery Dive newsletter. Loyalty memberships may be the key for small and mid-sized grocery players to win back Walmart e-grocery shoppers, according to the Brick Meets Click April 2025 report sponsored by Mercatus. Around two-thirds of households ordering groceries online from Walmart last month were Walmart+ members, according to Brick Meets Click Partner David Bishop Walmart+ has not only garnered more repeat shoppers for the mass retailer, but also seen its members spend more on online orders than non-members by over 40%. As grocery e-commerce keeps steadily growing, Walmart continues to reap the benefits over traditional grocers — and it has its Walmart+ program to thank for that. Walmart+ members are nearly 10% more likely to 'express intent' to reuse e-commerce services compared to Walmart customers who aren't members, per Brick Meets Click's findings. 'Historically, membership and subscriptions were considered more effective at building loyalty with regular customers, however, today we see that these programs are also attracting shoppers from rivals as households search for more savings,' Bishop added. The report noted that loyalty memberships also boost repeat customers month-to-month. Mass retailers continue to threaten conventional grocers with their online services. Over the past two years, mass retailers' household penetration grew from 46% to 50% while order frequency has 'increased steadily,' according to Brick Meets Click. Grocery e-commerce recorded its ninth consecutive month of sales in April, totaling $9.8 billion, a 15.2% increase compared to this period last year. Delivery led the growth, posting a 29% year-over-year increase to $4.2 billion in sales and contributing nearly three-quarters of the sales lift for the month, according to the press release. Ship-to-home also saw some growth, accumulating $1.9 billion in sales, an increase of just over 22%. Meanwhile, pickup sales remained flat at $3.7 billion as shoppers continue opting for delivery and the promotions companies offer in that channel, per Brick Meets Click. 'Discounted memberships have put Delivery in the spotlight, but lasting loyalty forms where speed, control, and value meet,' Mark Fairhurst, chief growth marketing officer for Mercatus, said in a statement. 'Regional grocers who combine fast, free Pickup with a compelling subscription program, data-driven rewards, and timely outreach to lapsed shoppers can turn trial orders into repeat business while protecting margins. Recommended Reading At brick-and-mortar powerhouse Walmart, e-commerce turns profitable Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
14-05-2025
- Business
- Yahoo
How Walmart handles Trump's tariffs could offer clues on retail health
By Ananya Mariam Rajesh (Reuters) - Results from Walmart, a bellwether for the U.S. retail industry, will offer proof on Thursday why the Arkansas behemoth is best placed to navigate the uncertainty from the Trump administration's tariffs. Walmart is among a handful of large companies that has not either pulled or slashed its forecast. The company last month reaffirmed its annual forecast, saying "nothing in the current environment changes its strategy". Since the announcement was made minutes before U.S. imposed a 145% tariff on China - Walmart's largest supplier - investors will watch for any adjustment to the outlook and whether it absorbs any tariff-related costs or passes them on to customers. The world's largest retailer has promised to keep prices low to keep its price advantage over competitors. its fiercest rival, is also "maniacally focused" on lower prices and has encouraged sellers to move more inventory to the U.S. before tariffs take effect. "Many consumers are prioritizing saving money and stretching their dollar a little bit further," Jefferies analyst Corey Tarlowe said. "They're prioritizing what they need over what they want. So they're trading into value-oriented to me paints a very clear picture that's conducive to success for Walmart." With the U.S. and China pausing trade escalations on Monday, retailers including Walmart have had to deal with a month of elevated tariffs. Many stopped shipments from China and reached into their inventories to stock shelves. Rival Target, unlike Walmart, expects annual sales to be flat and tariffs to weigh on its results. It reports on May 21. Walmart said in February it expects profit growth to slow this year even as sales rise. It forecast adjusted earnings per share for the fiscal year ending January 2026 in the range of $2.50 to $2.60, and sales growth of 3% to 4%. At that time, Trump had imposed 10% tariffs on goods from China and 25% on goods from Mexico and Canada. "Walmart should be able to effectively manage the increase in tariffs, given its strong global sourcing operation, healthy vendor relationships, and defensive product mix," Telsey Advisory Group analyst Joseph Feldman said. "Sales should be pretty solid and it feels like investors feel confident that Walmart will execute and operate in this environment." Its U.S. e-commerce business will be in focus as the company has said the division will achieve profitability for the first time in the first quarter. The business has seen double-digit growth for 11 straight quarters in the U.S. and clocked 16% growth globally in the fourth quarter. It accounts for just under a fifth of Walmart's annual revenue. The company's paid membership program, Walmart+, is of interest for investors who want to see if it is taking customers away from rivals Amazon and Costco. Walmart's stock has been on a tear over the past year, rising 60% to take its market value above $700 billion, and outperforming six of the so-called Magnificent Seven tech companies that led the market rally in 2023 and 2024. Only Tesla has performed better. For the first quarter, analysts polled by LSEG expect Walmart net sales to increase 2.7% to $165.88 billion and net income to fall 9% to $4.64 billion. "(Walmart's) more favorable positioning relative to the rest of retail will probably become even more evident as the year unfolds, when the operating environment could become much more challenging," UBS analysts said in a research note.
