Visa’s second-quarter results exceeded expectations, with consumer spending remaining strong despite concerns about a slowing economy. The company reported a 2.7% increase in shares after the bell, as consumers continued to use their cards for travel and dining out.
Despite higher interest rates, US consumer spending has remained resilient, with Americans still making big-ticket purchases and traveling internationally. Visa executives noted that international travel, particularly from the US and Europe, remained healthy, but Asia-Pacific travel was weaker due to a slower post-pandemic recovery.
However, strong e-commerce trends helped offset the weakness in Asian markets, with Visa’s payment volume increasing by 8% in the second quarter. Cross-border volume, excluding intra-Europe, saw a 16% jump, indicating strong international travel demand. Processed transactions also rose by 11% during the period.
Visa’s CFO, Chris Suh, expressed optimism about the company’s performance, stating that consumer spending across all segments remained stable. The company expects net revenue growth in the “low double-digit” range for the current quarter and reaffirmed its revenue and profit forecasts for 2024.
The positive earnings report comes after Visa and Mastercard reached a $30 billion settlement in March to limit credit and debit card fees for merchants. Visa’s second-quarter adjusted profit per share of $2.51 beat estimates, while its net revenue of $8.8 billion also exceeded expectations.
Overall, Visa’s strong performance reflects the resilience of consumer spending and the company’s ability to adapt to changing market conditions.