Finimize - 🏆 Walmart’s winning

What’s going on here?

Walmart was cool, calm, and collected last quarter, with some expectation-smashing results.

What does this mean?

While peers like Home Depot and Target had their ups and downs this week, Walmart strode through with confidence – and that wasn’t down to luck. Its massive grocery arm, the biggest in the US, played a huge part. And even though sales of nice-to-haves were unimpressive, cash-strapped shoppers were all over Walmart’s own-brand foods – opting for home-cooked meals over pricier dine-outs. All said, customers were both visiting stores more often and spending more too: in fact, the number of transactions swelled by 2.9% last quarter, and the average bill climbed by 3.4% to boot. All that momentum pushed same-store sales beyond forecasts, driving both revenue and earnings over target too. And to sweeten the deal, Walmart raised its annual profit outlook, sending investors into a tizzy.

Why should I care?

The bigger picture: Prime opportunity.

Walmart’s secret weapon in the market-share battle is the Walmart+ membership. For under $100 a year, members enjoy discounts and perks like free food delivery on orders over $35. And that membership isn’t just retaining customers: it’s making them spend more too. Ever since Walmart amplified its marketing efforts last year, the program’s growth has skyrocketed. And with its novelty, there’s ample room to expand – potentially giving pricier services like Amazon Prime a run for their money.

Zooming out: Ad-vantage Walmart.

Walmart’s pushing into other areas too, but not with a new gizmo or nibble this time: it’s actually advertising. After all, the firm’s got nearly 5,000 stores across the US, and about 90% of Americans live within 10 miles of one – meaning that Walmart sees a massive daily influx of customers. Capitalizing on that, the retail giant’s planning to ramp up its in-store ad space sales. Think ads on screens, checkouts, and aisles, as well as radio spots and sample stations.

What’s going on here?

The UK’s leading defense company BAE Systems announced its biggest-ever deal on Thursday.

What does this mean?

BAE Systems is riding high, with the Russian invasion of Ukraine driving demand for its military gear to record levels. And that surge in orders has not only led BAE to up its profit predictions: it’s spurred the firm’s ambitions to grow too. See, BAE just announced that it’s buying Ball Coporation’s aerospace division for the tidy sum of $5.6 billion, winning out over investment firms and other defense names. That whopper deal will bolster BAE’s presence in the US – where it already rakes in the biggest chunk of its revenue – and see it win a Colorado-based business specializing in military and space sensors too. And as for Ball, well, this deal lets the conglomerate zero in on what it does best: being the world’s top beer can supplier.

Why should I care?

The bigger picture: Expensive arms race.

Ever since tensions escalated in Europe, governments have been splashing out on weaponry, giving the defense sector a hefty boost. And that spending spree is also sparking some big-ticket maneuvers, defying the broader dealmaking slump. Take L3Harris Technologies, for instance, which recently shelled out $5 billion for rocket engine maker Aerojet Rocketdyne – or look at Germany, which has been splashing out on air-defense systems. Put it all together, and the aerospace and defense sectors have seen the total value of deals nearing the $40 billion mark over the past year.

For markets: Underwhelming UK.

BAE has seen its stock jump more than 80% since the start of last year – but make no mistake, it’s an outlier in the UK landscape. After all, the slowpoke FTSE 100 has barely moved over that same period, and it’s even dipped so far this year. And HSBC thinks it’s likely to continue to sit out the global stock rally this year, given the country’s murky economic forecast.