Walmart Inc raised its full-year profit forecast on Tuesday, partially reversing a sharp cut made less than a month ago, as discounts to remove excess merchandise and falling fuel prices helped it beat sales expectations. quarterly.

The shares, which have fallen more than 8% this year, were up 4% in pre-market trading. Shares of rivals Target Corp, Costco and Best Buy also rose on the news, while Dow Jones index futures trimmed losses.

Walmart said it now expects adjusted earnings per share in fiscal 2023 to fall between 9% and 11%.

Last month, the leading US retailer spooked markets around the world when it forecast an 11% to 13% drop – up from a previous forecast of a 1% drop – and warned that consumers were cutting their discretionary purchases at a much higher rate than feared, as rising inflation took a toll on their purchasing power.

This forced Walmart to make deep price cuts on items such as clothing to try to reduce the more than 61,000 million dollars of inventory it had at the end of the first quarter.

Walmart reported that its inventories stood at $59.92 billion at the end of the second quarter ended July 31, which is 25% higher than last year’s levels.

“I think it’s going to take another quarter, maybe a little bit into the fourth quarter, to get back to where we want to be from an overall inventory perspective,” Walmart CFO John David Rainey said.

Walmart’s total revenue in the second quarter rose 8.4% to $152.86 billion, helped by demand for food and other necessities. Analysts had expected revenue of $150.81 billion, according to IBES data from Refinitiv.

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