- Walmart raised its profit target for the year following "strong" results on Thursday.
- The retailer posted a 4.7% increase in net sales in the quarter to $167.8 billion.
- "The good results will come as a relief to the wider retail sector," said GlobalData's Neil Saunders.
Walmart posted better-than-expected sales for its second quarter on Thursday as shoppers continued to flock to the world's biggest retailer.
The retailer also raised its profit outlook, guiding for an increase of between 6.5% and 8% in consolidated adjusted operating income, up from the 4% to 6% increase it previously expected.
CEO Doug McMillon described the results as "another strong quarter."
Shares jumped almost 7.5% in premarket trading, in addition to a near-30% increase since the start of the year.
Walmart posted a 4.7% increase in net sales in the quarter to $167.8 billion and a similar jump in total revenues to $169.3 billion on Thursday. Those totals include revenues from both Walmart US and its international operations as well as Sam's Club, its warehouse chain.
However, comparable sales have been growing at a slower pace. They rose by 4.2% excluding fuel year-on-year for Walmart US in the quarter to July 31. In the same period last year, comparable sales were up 6.4%.
The decline was due to a slowdown in the growth of the average ticket, which grew just 0.6% in the quarter year-on-year.
Operating income jumped $500 million to $6.6 billion year-on-year.
But Walmart US still posted a jump in comparable sales versus the two previous quarters — to the end of April and the end of January — when year-over-year comparable sales were 3.8% and 4.0% respectively.
At Walmart US, there had been a growth in the number of upper-income customers as well as a 17% increase in e-commerce sales, it said.
"Although Walmart's overall growth has slowed a little since last quarter, today's numbers show it still has enough fuel in the tank to give the business a very nice lift," Neil Saunders, managing director of GlobalData, wrote in a note.
Jefferies analysts said in a note that Walmart's results were "strong." It beat analysts' consensus for comparable sales at Walmart US and Sam's Club, as well as for gross margin and operating income.
"In the context of a food sector in which inflation is moderating and where the gains from shopper switching are weakening, this is a solid performance which is testament to Walmart's superior execution," Saunders wrote.
"More broadly, the good results will come as a relief to the wider retail sector as poor trading at Walmart would be a bad omen for the rest of the industry."