Piper Sandler analyst Peter Keith is impressed with Walmart's apparel strategy, noting its market share gains through sharper pricing and a revamped private-brand lineup. The analyst observed that Walmart is expanding its private-brand apparel business. This move is helping the retailer broaden its customer reach, particularly with younger, fashion-forward consumers, and in rural markets.

Walmart's apparel overhaul started roughly four years ago, with the addition of Jen Jackson, senior vice president of Walmart Apparel Brand & Design. The retailer's strategy includes an in-house design team based in NYC. Walmart's focus on private label brands, with pricing, on average, -28% less than Target, is also a key differentiator.

Walmart's apparel sales grew in the mid-single digits last quarter, while Target's fell 4% year-over-year. Piper Sandler also highlighted the impressive growth of Walmart's private-label apparel brands, with Google searches up 46% year-over-year, compared to Target's 23%. Considering these factors, Piper Sandler raised its Walmart price target to $130.

This apparel strategy is a key component of Walmart's overall effort to compete with Target and other retailers. Walmart has been investing heavily in its private-label offerings. The retailer is also focused on improving its online presence and delivery options, all aimed at attracting younger shoppers and increasing overall sales.