(Reuters) -Visa’s first-quarter profit jumped nearly 11% on Thursday, as easing concerns about an economic slowdown encouraged customers to splurge during the holiday shopping season, pushing the payments giant’s shares up 2.5% in after-hours trading.
Retailers offered deep discounts on everything from apparel to toys and luxury products to lure cost-conscious consumers while online sales remained strong thanks to a boom in mobile shopping.
Payments volume – a gauge of overall consumer and business spending on Visa’s network – jumped 9%, while revenue rose 10% to $9.5 billion in the quarter.
The world’s largest payments processor also benefited from strong domestic and international travel demand, driven by improved pricing and the absence of severe weather-related disruptions.
Cross-border volume excluding intra-Europe, a measure of international travel demand, jumped 16%. Processed transactions rose 11% in the quarter.
The San Francisco, California-based company posted an adjusted profit of $5.5 billion, or $2.75 per share, in the three months ended Dec. 31. That compares with $4.9 billion, or $2.41 per share, a year earlier.
SPENDING OUTLOOK
“Visa’s strong first-quarter results reflected healthy spending during the holiday season and improving trends in payments volume, cross-border volume, and processed transactions growth,” said Visa CEO Ryan McInerney in a statement.
Although higher-for-longer interest rates were expected to be a dampener, Consumer spending continues to be underpinned by a solid labor market and continued wage growth,.
The bodes well for Visa and rival Mastercard as they pocket a small fee off each transaction on their networks.
Mastercard earlier in the day reported a fourth-quarter profit that beat Wall Street estimates as consumers ramped up spending during the holiday season.
Shares of both companies had underperformed the broader markets in 2024 on worries that a slowdown in major global economies could hurt the sector.
(Reporting by Jaiveer Singh Shekhawat and Manya Saini in Bengaluru; Editing by Sriraj Kalluvila and Maju Samuel)
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