US retail giant Walmart raised its full-year forecast and reported better-than-expected first-quarter results, betting on easing inflation to further boost demand for essentials and bring a rebound in sales of discretionary products like apparel and electronics.
The strong performance by the nation's largest retailer could assuage some investors' fears about ebbing US consumer spending.
Americans have largely been able to weather higher prices but a long bout of inflation has raised concerns that shoppers could become more constrained and a recovery in spending will be slower than previously expected.
While US consumer prices rose less than expected in April, domestic demand has shown signs of cooling as Americans struggle with higher mortgage rates and car insurance premiums.
John David Rainey, executive vice president and chief financial officer of Walmart, commented, "Our strong results this quarter clearly demonstrate the power of our global omni-retail capabilities and the team’s ability to execute with discipline.
"As we continue to reshape our business model, we’re focused on strategically investing in areas that reinforce our purpose and growth strategy."
Quarterly Highlights
Walmart reported total US comparable sales up 3.9%, excluding fuel, for its first quarter ended 30 April. Average transactions rose by a similar amount and unit sales also rose, Walmart said in a statement.
Analysts on average were expecting US comparable sales growth of 3.15%, according to LSEG.
First-quarter adjusted earnings per share came in at 60 cents easily beating the 52-cent average forecast. Total revenue of $161.51 billion (€148.6 billion) also topped estimates.
The retail bellwether now expects annual consolidated net sales to rise at the high end or slightly above its prior forecast of 3% to 4% growth.
It also expects adjusted profit per share to be at the high end or slightly above its prior estimate of $2.23 and $2.37, it said.
News by Reuters, additional reporting by ESM.
