(Reuters) -Walmart Inc raised its annual U.S. same-store sales forecast after beating analysts’ estimates on Tuesday, buoyed by customers splurging on back-to-school products from backpacks to clothes after more than a year of online learning.
Sales at U.S. stores open at least a year rose 5.2%, excluding fuel, in the second quarter ended July 31. Analysts had estimated a growth of 3.69%, according to IBES data from Refinitiv.
Walmart has been one of the beneficiaries of the stimulus checks given during the pandemic, with the latest quarter also getting a lift from President Joe Biden administration’s advance child tax credits.
The company said it now expects fiscal 2022 U.S. same-store sales to be up 5% to 6%, compared with the low single digits growth it had previously forecast.
“We grew market share in U.S. grocery, added thousands of new sellers to our marketplace, rapidly grew advertising businesses around the world,” Chief Executive Officer Doug McMillon said in a statement.
Walmart kicked off a big week of earnings from major U.S retailers, including Target and Macy’s, which come as investors focus on a resurgence in COVID-19 cases due to the more contagious Delta variant and cost pressures from persisting labor shortages and supply chain disruptions.
Still, Walmart forecast full-year and current-quarter profit to be largely above expectations. The outlook accounted for the continued strength in the U.S. economy and no significant additional government stimulus for the rest of the year.
The company, which reported its biggest online sales growth of 97% last year as people used its quick delivery services to order essentials at the height of the pandemic, said U.S. e-commerce sales rose 6% in the second quarter.
Operating income rose 21.4% to $7.35 billion, while Walmart reported adjusted earnings per share of $1.78.
Total revenue rose 2.4% to $141.05 billion, ahead of expectations of $137.17 billion.
(Reporting by Aishwarya Venugopal in Bengaluru and Richa Naidu in Chicago; Editing by Sriraj Kalluvila)
