Walmart (NYSE:WMT), the most important U.S. retailer (not less than for now), was among the many top gainers on Thursday as its stock price surged some 6%, reaching an all-time high of $64 per share. The catalysts for the big-box behemoth included a first-quarter earnings report that destroyed analysts’ estimates and an outlook that promised more gains to come back.

Let’s see if Walmart is a stock it is best to add to your portfolio.

Recession-proof?

Walmart has been considered one of the steadiest performers over time; actually, one might even call it recession-proof. Over the past 10 years, it has averaged an annualized return of 9.5%, but whenever you add within the reinvested dividends, the common annualized return bumps as much as 11.1%. As a sworn statement to its regular nature, Walmart is taken into account a Dividend King, because it has increased its annual dividend for 52 consecutive years.

As further testimony, Walmart stock rarely goes too high or too low. Since 2008, it has had just three negative years, and in two of those years, 2009 and 2018, it only lost 3% for the 12 months. When the market tanked in 2022, Walmart stock was statistically flat.

Because the discount-retail leader, Walmart outperforms during times of high inflation or low economic growth as consumers hunt down higher deals. In the primary quarter of its fiscal 2025, that proved to be the case once more because the economy slowed and inflation remained high. Nevertheless, this time around, that strength got here with a little bit of a distinct twist as Walmart saw a spike in business from higher-income earners searching for value alongside middle- and low-income consumers.

“Traffic and sales growth were strong across each stores and digital channels, and we’re pleased with the unit growth. We’re seeing higher engagement across income cohorts with upper-income households continuing to account for nearly all of the share gains,” CFO John David Rainey said on the earnings call.

Rainey added that the expansion amongst consumers with annual incomes over $100,000 is driven by convenience as much as value.

“Convenience matters to someone regardless of what … your income level is, and we expect that to be durable. We don’t expect that to alter,” Rainey said.

Walmart management also reported that the brand new Bettergoods brand has been useful in attracting customers across the income spectrum because it offers higher-quality food at low prices, with most products priced under $5.  

Earnings spike

The rise in high-income consumers was considered one of the aspects that contributed to Walmart’s strong first-quarter earnings. Revenue rose 6% 12 months over 12 months to $161.5 billion, while the retailer’s gross profit margin improved 42 basis points to 24.1%.

Operating income gained 9.6%to $6.8 billion, while earnings per share (EPS) surged 200% to 63 cents. Adjusted EPS was 60 cents, up 22%.  

One other big revenue driver for Walmart was e-commerce, which jumped 21% 12 months over 12 months globally and 22% within the U.S. It was fueled by a surge in store-fulfilled pick-up and delivery. Promoting revenue also rose, jumping 24% 12 months over 12 months.

“When I feel concerning the headlines from the quarter, what goes through my mind is, first, the eCommerce growth. I feel the progress we’re making on convenience for patrons is a giant deal … Our store success in addition to through success centers, the marketplace is growing, and that brings together with it growth in promoting and membership. It was great to see each of those up 24%,” said President and CEO Doug McMillon on the earnings call.

Is Walmart stock a buy?

Walmart also provided guidance for the second quarter, calling for its net sales to extend by 3.5% to 4.5% and operating income to rise by 3% to 4.5%. The retailer estimated its adjusted EPS at 62 cents to 65 cents, which can be a rise over Q1.

For the complete fiscal 12 months, Walmart raised its guidance for net sales, adjusted operating income and adjusted EPS to the high end or barely above previous estimates. The increases are based on the better-than-anticipated performance in Q1 and an expectation for that momentum to proceed.

Walmart’s P/E ratio has jumped a bit to 31, but its forward P/E is 25, and it has a low 0.75 price-to-sales ratio.

I feel Walmart stock is just about all the time a buy given its stability and growth over time, and with uncertain economic conditions ahead and its growth in e-commerce, it looks even higher at once. This will not be a stock that’s going to shoot the lights out, but it is going to provide nice balance in a portfolio.

Disclaimer: All investments involve risk. Under no circumstances should this text be taken as investment advice or constitute responsibility for investment gains or losses. The data on this report mustn’t be relied upon for investment decisions. All investors must conduct their very own due diligence and seek the advice of their very own investment advisors in making trading decisions.