Walmart beats earnings estimates as low prices lure bargain hunters

Walmart raised its full-year forecast and reported better-than-expected first-quarter results on Thursday.

U.S. retail giant Walmart raised its full-year forecast and reported better-than-expected first-quarter results on Thursday, betting on easing inflation to further boost demand for essentials and bring a rebound in sales of discretionary products like apparel and electronics.

Shares of the Bentonville, Arkansas-based company were up six per cent in premarket trading.

If these gains hold, the stock will hit a record on Thursday.

The strong performance by the nation’s largest retailer could assuage some investors’ fears about ebbing U.S. consumer spending.

Americans have largely been able to weather higher prices but a long bout of inflation has raised concerns that shoppers could become more constrained and a recovery in spending will be slower than previously expected.

While U.S. consumer prices rose less than expected in April, domestic demand has shown signs of cooling as Americans struggle with higher mortgage rates and car insurance premiums.

On Thursday, Walmart reported total U.S. comparable sales up 3.9 per cent, excluding fuel, for its first quarter ended April 30.

Average transactions rose by a similar amount and unit sales also rose, Walmart said in a statement. Analysts on average were expecting U.S. comparable sales growth of 3.15%, according to LSEG.