Walmart, Target to witness higher sales as U.S. schools start reopening

U.S.  retailing giants Walmart and Target are anticipated to witness higher sales as parents shop for clothes and backpacks for children returning to school after the relaxation of COVID-19 restrictions.

Industry evaluations anticipate overall back-to-school expenditure to surpass USD 100 billion and increase 6.4% from the past year when colleges, schools, and office meetings were mainly confined to computer screens.

Founder of Retail Metrics, Ken Perkins, mentioned that consumers have a considerable amount of cash with increased savings rate during the pandemic, and there is significant demand for back-to-school products like school supplies, sneakers, and laptops including many more. 

U.S. President Joe Biden's administration’s stimulus checks and advance child tax credits are also expected to boost up sales in the back-to-school season in retail even though the Delta variant daunts to slow down economic recovery.

While increased costs, labor shortages, and industry-wide supply chain disturbances in the U.S. are likely to affect the margins this quarter, analysts speculate that profits made by Target and Walmart during the pandemic are foreseen to nullify some of those pressures.

Howard Meitiner, MD of consulting firm Carl Marks Advisors, stated that no retailer would have expected that the back-to-school season would be this strong. Walmart is in a notably strong position as it has invested significantly in its online business and is ready for the customers who want to shop from its stores, he added.

The world’s largest retailer witnessed an increase for the first time in 2021, with July visits increasing 2.9% in comparison to the same time in 2019, while Target store visits augmented 15.9% during the same timeframe.

Knowledgeable sources cite that the retailer is anticipated to post a 3.39% increase in U.S. same-store sales and adjusted gains of USD 1.57 per share when it reports second-quarter, while quarterly comparable sales and profit of Target is predicted to be around 8% and USD 3.49 per share, respectively.

Industry experts perceive strong back-to-school sales as a positive sign for the important holiday shopping season.

Source Credits –

https://www.investing.com/news/stock-market-news/walmart-target-to-see-sales-boost-as-kids-head-to-school-2590887