Visa Inc. saw spending growth slow the most since the depths of the pandemic as inflation weighs on consumers. Shares gained as profit exceeded analysts’ expectations.
Volume on the network rose 10.5% to $2.93 trillion in the fiscal fourth quarter, Visa said Tuesday. That was shy of the 11% increase analysts in a Bloomberg survey were expecting and a decrease from the 12% growth the firm reported for the previous three months. It was the slowest growth since Visa posted less than 5% for the first fiscal quarter of 2021.
“As we look ahead, while some short-term uncertainty exists, we remain confident in Visa’s long-term growth trajectory across consumer payments, new flows and value-added services,” Chief Executive Officer Al Kelly said in a statement.
Visa and its rivals have seen spending increases cool with inflation soaring to once-in-a-generation levels. They’re also facing tough comparisons with a year earlier, when spending jumped as economies opened back up as Covid-19 vaccines proliferated and the pandemic began to recede.
When planning for 2023, Visa “did not factor in a steep economic downturn or recession,” Kelly said on a conference call with analysts. If such a decline occurs, “it will have some impact.”
Cross-border volume, a key metric for San Francisco-based Visa since such transactions are typically more lucrative than domestic spending, climbed 36%, matching analysts’ expectations.
“Some economies around the world could face increased pressures so we will be monitoring things very closely,” Kelly said on the call.
Revenue for the three months through September jumped 23% on a constant-dollar basis from a year earlier to $7.8 billion, while earnings totaled $4.1 billion, or $1.93 a share. Analysts were expecting adjusted profit of $1.86 a share.
Visa has been shelling out more in rebates to persuade banks and retailers to route a greater number of transactions over its network. Such incentives jumped 20% to $2.86 billion.
The shares gained 0.83% to $196 at 7:41 p.m. in extended New York trading following the announcement. They ended regular trading at $194.38, down about 10% this year.
