Paying more and offering additional incentives to its employees appears to be boosting bottom line for Walmart Inc. (WMT) .
The company's college tuition programs, pay rises, and increased focus on its workers are helping drive earnings according to analysts, even as broader criticism of the management persists.
Earlier this year, a $2 pay rise for hourly employees, raising wages from $9 per hour to $11 per hour, was likely welcome news to employees on the bottom rung of the company's pay scale.
"Today, we are building on investments we've been making in associates, in their wages and skills development," explained CEO Doug McMillon.
The shift towards focus on the workers in the company has been beneficial, according to Stephens Inc. research analyst Ben Bienvenu, whose firm maintains common stock holdings in Walmart and provides investment banking services for the retailer.
"Same store traffic has really increased since they started this investment [into the workforce]," he told Real Money. "I think today's results put an exclamation point on that."
The results from today's earnings certainly back up Bienvenu's sentiment, as same-store purchases grew 4.5% in the second quarter. The marked increase helped boost total revenue to colossal $128 billion for the quarter.
Bienvenu described the change in labor dynamic as a change in philosophy from leadership.
"[Walmart leadership] looks at the world through the prism of benefitting their constituents. Historically, this has been by providing the lowest prices possible to their customers," he said.
However, he noted that in recent years, the campaigns such as the ones aimed at raising wages, providing training, and allowing for $1 a day college tuition has changed the focus toward the company's 2.1 million person-strong workforce.
To be sure, the reforms are not cost-free and Bienvenu noted that there are costs associated with improving employees' compensation and public perception, which leads to a better customer experience.
"The changes are costly, but I think they work toward delivering better overall service," he explained.
Still, issues remain with the company's structure that have drawn vocal opponents, most notably over the pay disparity between CEO Doug McMillion and the average Walmart employee, a concern not necessarily unique to Walmart.
2018 SEC filings reveal that Doug McMillon makes $22.8 million per year. The hourly wage calculation based on a 40-hour work week for that amount of annual compensation equates to $10,961.54 per hour, almost 1000 times the amount that the lower wage workers earn.
Fair or not, as the country's biggest retailer, Walmart will always be scrutinized on how it treats its employees.