Walmart lifts profit forecast on strong US sales, limited tariff hit

Walmart lifted its full-year profit forecast Thursday after better-than-expected results on solid US consumer spending, communicating the company´s confidence that earnings won´t be significantly dented by trade tariffs.

The world´s biggest retailer, releasing second-quarter results amid rising fears of a US recession, described the consumer environment in America as in "relatively good shape" as the company notched another quarter of growth in US comparable sales, a closely-watched benchmark, jolting shares higher on Wall Street.

Walmart said full-year earnings per share will range from a slight decrease to a slight increase from last year, an improvement on the original outlook for a decline in the low single-digit percentage range.

The company attributed the shift to a better-than-expected first half of the year.

"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.

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.

Walmart has been dueling with Amazon on faster home-delivery programs and in June unveiled a new venture to stock goods in customers´ refrigerators in three American cities.

Analysts view the investments as necessary, but they have hit the company´s profit margins.

The retail giant has avoided specifics on how it is responding to tariffs on individual items.

The company´s projections incorporate the latest US tariff plans, including Tuesday´s announcement by US President Donald Trump of a delay on a fourth round of levies on Chinese goods that spared cellphones and many toys, but still hit many consumer categories including apparel and televisions.

The fourth round of tariffs, some of which go into effect on September 1, "affects a larger part of our assortment than the prior tariffs," Chief Financial Officer Brett Biggs said in a statement.

He added that the company "has been able to thoughtfully manage pricing and margins with both our customers and shareholders in mind."