Walmart, on Tuesday, raised its outlook for the year after benefiting from increased spending on nonessential items and an uptick in pick-up and delivery orders.
The company – the largest U.S. retailer and a key indicator of U.S. consumer sentiment – forecast net sales to grow between 4.8% and 5.1%, up from its prior forecast of 3.75% to 4.75% sales growth.
It also continues to get a significant boost from higher earners.
"We had a strong quarter, continuing our momentum," Walmart CEO Doug McMillon said in the company's earnings release. "In the U.S., in-store volumes grew, pickup from store grew faster, and delivery from store grew even faster than that."
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The company reported that its third-quarter revenue climbed more than 5% from the prior quarter to $169.6 billion, beating Wall Street's estimate of $167.72 billion. Adjusted earnings per share also beat Wall Street estimates by 5 cents.
In the three-month period that ended Oct. 31, sales at U.S. stores jumped 5.3% due to "strength across merchandise categories and physical and digital channels," Walmart reported.
The increase in discretionary spending marks a reversal of the trend seen in recent years, when inflation squeezed household budgets and forced many shoppers to focus on essential items.
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For the prior three-month period, U.S. transactions grew 3.1%, and the average ticket increased by 2.1% year over year, according to Walmart. The company said its also gaining more shoppers, primarily from upper-income households.
E-commerce sales rose 22% in the U.S., led in part by store-fulfilled pickup and delivery.
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Telsey Advisory Group Senior Managing Director Joe Feldman projected earlier this month that consumers during the holiday season would be "likely to remain resilient and selective with how they spend, including a gradual shift back toward discretionary product."
However, the National Retail Federation (NRF), the largest retail trade group in the U.S., reported a modest growth in holiday shopping.
The NRF projected that total spending throughout November and December will grow between 2.5% and 3.5% over 2023 to between $979.5 billion and $989 billion.
