Axios Closer

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Thursday ✅.

Today's newsletter is 633 words, a 2½-minute read.

🔔 The dashboard: The S&P 500 closed down 0.2%, as the Dow vaulted briefly to a new record intraday.

  • Biggest gainer? Walmart (+7.0%), on strong quarterly earnings. (See below.👇)
  • Biggest decliner? Martin Marietta Materials (-5.1%), the building materials supplier. ¯\_(ツ)_/¯

1 big thing: Walmart reaches new high

Illustration: Aïda Amer/Axios

The strength of Walmart's first-quarter results even surprised Walmart.

Why it matters: If the retail giant's earnings are truly a bellwether for consumer spending, one thing was confirmed this morning — consumers are still spending on value and convenience.

Between the lines: Walmart reported 6% revenue growth for Q1 compared to a year ago, including a 3.8% jump in U.S. comparable sales. And don't chalk it up to price hikes.

  • "These are not inflation-driven results," CEO Doug McMillon said on the company's conference call.
  • Executives said its customers are buying more stuff, and they're doing it more often.

Investors sent Walmart shares up 7% today, which set a new high, as revenue growth exceeded the company's own guidance for the quarter.

Reality check: "Many consumer pocketbooks are still stretched, and we see the effect of that in our business mix," CFO David Rainey said on the call.

  • He said shoppers are spending more of their paychecks on non-discretionary categories and less on general merchandise like home goods and electronics.
  • Grocery sales rose by mid-single digits, while the company said more than half of all checkouts contained one of its new private brand items, 70% of which are priced under $5.

Between the lines: "Value seekers" largely drove growth for the quarter, executives said, a trend the company started to observe last year.

  • Walmart said it gained market share in the quarter, driven by upper income households (over $100,000 annually), though it said overall engagement grew across all income groups.
  • The second catalyst, "convenience," was on display through a 22% jump in e-commerce at Walmart U.S., led by its store-fulfilled pickup and delivery, as well as its platform for third-party sellers.

The bottom line: Executives said Walmart's offering is built to withstand economic cycles. It certainly benefited from this one.

2. Bonus chart: New heights

A line chart that tracks the daily change in Walmart's stock price from January 2 to May 16, 2024. The stock price gradually rises with some fluctuation, then spikes on May 16 to reach +20.5% for the year.
Data: Yahoo Finance; Chart: Axios Visuals

Walmart's market cap topped the $500 billion mark today for the first time.

  • Its shares closed up 7% for the day at $64.01, leaving it with a market value of $515.9 billion.

3. What's happening

🏪 Wayfair is opening its first large-format store. (Axios)

✂️ Under Armour to cut jobs, expects sales to drop more than 10% this fiscal year. (WSJ)

4. UAW South

Illustration: Natalie Peeples/Axios

The UAW is hoping for a snowball effect in a place where it rarely snows in real life: the South.

Tomorrow we'll find out whether the autoworkers union has prevailed in its campaign to unionize its second plant in as many months in the South, where anti-union sentiment and pro-business laws often undermine organizing efforts.

  • More than 5,000 workers at the Mercedes-Benz manufacturing campus in Tuscaloosa County, Alabama, are eligible to vote on whether to join the UAW.
  • The National Labor Relations Board expects to announce results of the vote Friday afternoon.

Context: The UAW scored a historic victory in April when Volkswagen's factory in Chattanooga, Tennessee, became the first non-Detroit Three auto assembly plant in the U.S. to be unionized.

  • Volkswagen and Mercedes are among the 13 non-Detroit Three automakers the UAW is targeting for unionization.

Go deeper

5. The classics, on the go

Illustration: Aïda Amer/Axios

Classic video games are having a moment.

  • Apple's recent decision to allow video game emulators in its App Store has sparked a huge wave of fresh interest in playing and preserving the classics.

The big picture: Emulation — which allows games designed for old devices to run on new ones, like iPhones and iPads — enables older gamers to revisit childhood classics and younger ones to get a taste of what gaming was like in the halcyon 8-bit days.

Zoom in: Delta, which emulates old-school handhelds and consoles like Nintendo's Game Boy and SNES, quickly emerged as a big winner, with millions of downloads in the past month, developer Riley Testut tells Axios.

The bottom line: It's never been easier to enjoy classic games.

Today's newsletter was edited by Pete Gannon and copy edited by Sheryl Miller.

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