Walmart’s apparel assortment and value pricing ’impressive’, Piper says

Investing.com -- Piper Sandler analyst Peter Keith said in a note Tuesday that Overweight-rated Walmart’s apparel strategy continues to stand out as the retailer gains market share through sharper pricing and a revamped private-brand lineup.

Keith wrote that the firm “continue to be impressed by WMT's apparel assortment and value pricing,” adding that these factors are helping broaden the retailer’s customer reach.

According to the analyst, Walmart was “significantly ramping and expanding its private brand apparel business over the last several years,” prompting the firm to analyse pricing differences with Target.

On comparable private-brand items, Keith noted that Walmart is priced at an average -28% discount to TGT, a gap the firm believes supports continued outperformance in the category and positive gross-margin implications.

The report highlighted that Walmart’s apparel overhaul began about four years ago with the hiring of Jen Jackson, senior vice president of Walmart Apparel Brand & Design.

Keith mentioned that Jackson has built out an apparel design team based in NYC, allowing Walmart to target “a younger, more fashion-forward consumer” rather than focusing primarily on basics.

Piper Sandler adds that rural markets have shown strong adoption of Walmart’s new exclusive brands, “surpassing initial expectations.”

Search-interest data also pointed to Walmart’s growing momentum. Piper Sandler found that Walmart’s private-label apparel brands saw Google searches rise “an impressive +46% Y/Y,” compared with +23% for Target.

The firm said Walmart’s apparel sales rose mid-single digits in the most recent quarter, while Target’s fell 4% year over year.

Piper Sandler raised its Walmart price target to $130, citing higher gross-margin estimates tied to apparel strength.

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