By: Agence France Presse
Walmart lifted its full-year profit forecast Thursday after better-than-expected results on solid US consumer spending, reflecting confidence that trade frictions will not significantly dent earnings.
Amid rising fears of a US recession, the world’s biggest retailer said the American consumer as in “relatively good shape,” as it posted another quarter of growth in US comparable sales, a closely-watched benchmark, jolting shares higher.
Walmart said full-year earnings per share will range from a slight decrease to a slight increase over last year, an improvement on the original outlook that called for a decline.
“Customers are responding to the improvements we’re making, the productivity loop is working, and we’re gaining market share,” said Chief Executive Doug McMillon.
Net income was $3.6 billion, up from an $861 million loss in the year-ago period, when one-time costs related to its Brazil business dented results.
Revenues rose 1.8 percent to $130.4 billion.
The results caught President Donald Trump’s eye, and he tweeted that the retail chain is a “great indicator to how the US is doing.”
Walmart officials reiterated their firm support for free trade, after warning in June that proposed tariffs on a broad swathe of consumer goods imported from China are “likely to hit low-income American families the hardest.”
Walmart has been dueling with Amazon over faster home-delivery programs and in June unveiled a new venture to stock goods in customers’ refrigerators in three American cities.
McMillon said Walmart had boosted its competitive position in several categories, including food, health and wellness and toys, attributing the gains to heavy investments in e-commerce and smartphone applications that have strengthened ties to American households.
Analysts view the investments as necessary, but they have hit the company’s profit margins in the near term.
The article is first published HERE.