(Reuters) – Walmart raised its annual sales and profit targets on Thursday and reported better-than-expected results as the retail giant benefited from footfall with price-conscious consumers, easing fears of a slowdown in spending by consumption.
The title of the number one retailer in the United States gained around 1.3% in pre-market trading.
The group has kept its grocery prices low to face competition from Target and Kroger, even as the industry faces higher costs.
As a result, in the first quarter, sales at Walmart’s U.S. stores open for at least a year beat expectations and rose 7.4%, excluding fuel.
“We cut expenses, increased operating margin and grew profits faster than sales,” said Doug McMillon, general manager of Walmart.
“Walmart clearly benefited from food and fuel sales, which helped offset the decline in discretionary spending,” said Art Hogan, head of market strategy at B Riley Wealth.
The retailer now expects full-year earnings per share to be between $6.10 and $6.20, down from $5.90 to $6.05 previously. Analysts had expected average earnings of $6.16 per share, according to Refinitiv data.
The company also expects net sales to increase by around 3.5%.
Walmart’s operating profit rose 17.3% in the quarter to $6.24 billion, while adjusted earnings per share were $1.47.
(Reporting Aishwarya Venugopal in Bangalore and Siddharth Cavale in New York; French version Augustin Turpin)
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