On Thursday, Walmart Inc WMT has reported its results for the second quarter of the fiscal year, beating Wall Street estimates for both revenue and profit. Due to the strength of its half-year results, the largest US retailer has raised its full-year forecast. This is quite a contrast to the cautious Home Depot HD The report warned of declining sales on Tuesday, and investors were excited by what they heard: Walmart shares initially rose 8 percent after the report was released.

Second quarter highlights

For the quarter ended July 31, Walmart reported a nearly 5% increase in sales to $169.34 billion, beating the LSEG estimate of $168.63 billion. Chief Financial Officer John David Rainey noted that the increase in sales was not due to higher prices, but rather to higher unit sales. Rainey also added that Walmart has focused on pushing suppliers to lower prices.

Excluding fuel, Walmart’s comparable sales in the U.S. increased 4.2% year over year. Also excluding fuel, Sam’s Club’s comparable sales increased 5.2%.. Global e-commerce sales grew 21%, while the US alone saw 22% e-commerce growth. Year-over-year, transactions increased 3.6% and the average amount increased 0.6%.

Net income fell to $4.5 billion, or 56 cents per share, while adjusted earnings per share of 67 cents also beat LSEG’s estimate of 65 cents.

Forecast for the full year

Walmart had previously forecast sales growth between 3% and 4% and adjusted earnings per share in the range of $2.23 to $2.37. While Home Depot warned of a decline in consumer spending, Walmart now expects sales growth between 3.75% and 4.75% and adjusted earnings between $2.35 and $2.43 per share.

Walmart gave rise to hope for a turnaround in spending behavior.

Along with retail sales data for July, Walmart showed that consumers are shaking off their fears as they continue to face a challenging macroeconomic environment. More importantly, unlike Home Depot, which warned of a consumption slowdown, Walmart raised hopes that the retail spending slowdown may be coming to an end with sales and profits above estimates. Retail sales were also much stronger than expected in July, rising 1%, beating the consensus estimate of 0.4% and marking the best retail sales in more than two years. However, auto sales contributed heavily to this increase, as without them, retail sales grew only 0.4%. While Home Depot showed that consumers are hesitant about home purchases and renovation projects, these numbers still point to the start of a positive retail trend, with Walmart continuing to benefit from price-conscious consumers.

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