by Siddharth Cavale and Ananya Mariam Rajesh
(Reuters) – Walmart raised its outlook for the year on Thursday and published better-than-expected first-quarter results, with the U.S. retail giant banking on a decline in inflation likely to boost demand.
The stock was up 6% in pre-market trading, which could take the stock to a record high.
Strong results from the largest retailer in the United States could allay fears of a slowdown in consumer spending in the country. If American household consumption has so far resisted rising prices rather well, a prolonged period of inflation risks ultimately affecting spending.
On Thursday, Walmart announced a 3.9% increase in its sales in the United States, excluding fuel, for the first quarter which ended April 30. Analysts on average expected growth of 3.15%, according to LSEG data.
Online sales rose 22%, surpassing the 17% growth recorded during the traditionally strong holiday season.
During the pandemic, Walmart invested heavily in its e-commerce activities, expanding its range of available products and launching an annual subscription offering fast deliveries.
First-quarter adjusted earnings per share were $0.60, beating the average forecast of $0.52. Total revenue reached $161.51 billion (€161.51 billion) and also exceeded estimates.
Walmart now expects its annual consolidated net sales to grow at the high end of the range or slightly above the prior forecast of 3% to 4% growth.
The group is also targeting adjusted earnings per share at the high end of the range or slightly above its previous estimate of between $2.23 and $2.37.
(Reporting Ananya Mariam Rajesh in Bangalore and Siddharth Cavale in New York, French version Nathan Vifflin, edited by Blandine Hénault)
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