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Walmart raised its annual profit forecast after quarterly sales beat expectations, cementing the chain’s status as a winner from a period in which high inflation has stretched the finances of American households.
The company on Thursday forecast that its net sales would increase by 3.75 per cent to 4.75 per cent in the current fiscal year, about 0.75 percentage points higher than its previous guidance.
Adjusted operating profit is likely to grow by 6.5 to 8 per cent, up from a previous forecast of about 4 to 6 per cent.
Shares in Walmart jumped almost 6 per cent in pre-market trading.
US consumers have shown signs of spending fatigue after years of persistent inflation that is only now subsiding. The price pressures have been good for Walmart, where transaction numbers are on the increase in the US.
The company said that in the second quarter that ended last month, its namesake grocery and merchandise store chain gained share of US sales “across income cohorts primarily driven by upper-income households”, attracted by its “value-convenience proposition”.
Same-store sales rose by 4.2 per cent year on year — well above Wall Street estimates — and increased by 4.6 per cent at its member-only Sam’s Club warehouse chain.
Quarterly revenue of $169.3bn topped estimates of $168.47bn after rising 4.8 per cent year on year, faster than Walmart’s previous guidance.
Net income fell 43 per cent to $4.5bn, a drop that reflected certain one-off items. Excluding those items, adjusted earnings per share rose by nearly 10 per cent to 67 cents, beating estimates.
“Each part of our business is growing,” said Doug McMillon, Walmart chief executive.
