(Reuters)

PayPal Holdings Inc forecast full-year profit above Wall Street estimates today (February 9), as the payment firm’s customers undeterred by decades-high inflation continue to spend, and said Chief Executive Dan Schulman will retire at the end of the year.

While macroeconomic pressures have begun to pressure American consumers, particularly those in the lower income bracket, they have so far remained resilient against a challenging economy.

Shares in the payments heavyweight rose six per cent in extended trading after results.

Executives at major US banks, including Bank of America’s chief, said earlier in January that overall spending continues to tread largely positive waters, but the pace of growth has begun to slow.

RESILIENCE OF CORE CUSTOMERS

The sentiment was also echoed in the quarterly results of major US card firms – Visa and American Express, which touted the resilience of their core American customers.

PayPal said it expects full-year adjusted profit of roughly US$4.87 on a per share basis. Analysts on average had expected US$4.75 per share, according to Refinitiv IBES data.

The company’s upbeat forecast also comes alongside its previously announced commitment of lowering expenses in the backdrop of its key e-commerce segment feeling the pinch of a slowdown.

AMONG BIGGEST WINNERS DURING COVID

Last week, PayPal said it will lay off seven per cent of its workforce, or about 2,000 employees, joining a string of fintech firms which have slashed jobs to cut costs in an increasingly tumultuous operating environment.

PayPal was one of the biggest winners during the COVID pandemic when people locked at home used its platform while shopping online. However, the company’s growth showed signs of slowing through the past year as countries around the world lifted restrictions and macroeconomic conditions deteriorated.

Its revenue rose nine per cent on an FX-neutral basis to US$7.4 billion in the fourth quarter ended December 31.

PayPal earned a profit of US$1.24 per share on an adjusted basis in the quarter, versus US$1.11 per share in the year-ago quarter.