Walmart's Q2 profit up 5.7 per cent despite global slowdown

Walmart Stores Inc posted a 5.7 per cent surge in second-quarter net income and the world's largest retailer upped its outlook for the full year as frugal shoppers returned with the retailer's renewed emphasis on lowest prices on everything from clothes to electronics.

However, analysts say the chain is seeing its momentum slow down in the difficult economic environment at home and abroad. Its total revenue fell short of Wall Street estimates, and the company was deferring plans in Mexico, its largest international division, in the wake of bribery charges there.

It was also scaling store growth plans back in China and Brazil to boost profitability in those operations.

Investors, who had pushed the stock up 25 per cent since mid-May, pulled shares down over 3 per cent on the news.

Walmart is seen as economic bellwether thanks to the fact that it accounts for around 10 per cent of non-automotive retail spending in the US. According to the Bentonville, Arkansas-based company, its customers were still under the squeeze of economic problems in the US and abroad.

In the US, the retailing giant's low-income shoppers were still facing trouble stretching their dollars to the next payday, and that financial duress has extended overseas in the latest quarter. The company said it has been helped mostly by a focus on low prices.