Walmart (WMT.US) launches its own women's clothing brand, aiming to attract younger consumers

According to information from Zhihui Finance APP, US retail giant Walmart (WMT.US) will launch a brand-new private label women’s apparel brand called Scenario in its stores to attract younger consumers. It is reported that most Scenario items will be priced under $25, including jeans, women’s shirts, and tops. These products will be displayed in the areas of Walmart stores previously used for the Time and Tru apparel series (Walmart’s earlier private label women’s clothing brand).

This move comes as Walmart’s apparel and accessories sales have grown for seven consecutive quarters. At the same time, Walmart continues to grab market share from department stores and specialty clothing retailers. Denise Incandela, Walmart's Executive Vice President of Fashion, stated that Walmart realizes it has not fully met all consumer needs in apparel. According to company data, “Although our customers appreciate the outstanding value we provide, they do not equally recognize our style and quality.”

It is worth noting, however, that Walmart’s latest financial report released last week showed that although second-quarter revenue reached $187.94 billion (up 5.9% year-over-year) surpassing the market expectation of $186.87 billion, and adjusted earnings per share at $0.81 also exceeded the expected $0.74, US same-store sales (excluding fuel) grew by only 2.6%, marking the lowest level in over six years and well below the market expectation of 3.7% to 3.8%. As a retail bellwether serving over 150 million customers each week, the slowdown in Walmart’s same-store sales growth is sparking deep concerns in the market about a weakening overall consumer environment.

In addition, although Walmart raised its full-year guidance — its total net sales growth guidance was lifted from the previous 3.5%-4.5% range to 4%-5%, and the adjusted full-year EPS guidance was increased from $2.75-$2.85 to $2.80-$2.87, the strength of the earnings guidance fell short — the midpoint of the full-year EPS guidance at $2.835 is below the market estimate of $2.90. This has triggered investor concerns that if Walmart, a retailer that has historically thrived amid consumer downtrading trends, is now starting to see signs of slowing growth, an inflection point for the overall consumer economy may be approaching.