Walmart’s promise of low prices proves to be a powerful draw in the third quarter

By ANNE D'INNOCENZIO The Associated Press

FILE - People walk by the Walmart booth during the CES tech show on Jan. 9, 2024, in Las Vegas. (AP Photo/John Locher, File)[ASSOCIATED PRESS/John Locher]

NEW YORK (AP) — Walmart ratcheted up sales and profits again in the third quarter with its comparatively low prices proving a powerful draw for shoppers seeking to cut spending where they could.

The nation’s largest retailer raised its outlook for the year as well, underscoring its confidence in a strong holiday shopping season. The company’s shares rose nearly 4% in premarket trading Tuesday.

Walmart is among the first major U.S. retailers to report quarterly results and provides a peek into how Americans are feeling as they head into the holiday season.

Industry analysts expect consumers to show up in force, though sales may not meet last year spending levels by Americans.

A post-pandemic inflation spike sent prices about 20% higher overall compared with three years ago and it soured Americans’ outlook on the economy, a key reason given by voters for sending Donald Trump back to the White House.

Yet even as many complained of how costs have strained household budgets, strong consumer spending, continues to drive steady growth in the U.S. economy. Retail sales rose 0.4% from September to October, the Commerce Department said Friday, a solid increase though it was half of the previous month’s jump.

Walmart, based in Bentonville, Arkansas, reported net income of $4.58 billion, or 57 cents per share, in the three months ended Oct. 31. That compares with $453 billion, or 6 cents per share in the year-ago period.

Adjusted earnings were 58 cents per share, five cents better than Wall Street had expected, according to a survey by FactSet.

Sales rose 5.5% to $169.59 billion, up from $160.8 billion in the year-ago period, and also easily beat analyst projections.

Comparable store sales — which include online and stores open for the past 12 months — rose 5.3% in the U.S. That is an acceleration from the 4.2% jump in the U.S. in the second quarter and 3.8% in the first quarter.

Sales reflect broad-based strength across all product categories and physical and digital channels, the company said.

The number of transactions and the average amount customers spent during each of those transactions at Walmart was higher in this quarter than it was during the same three months last year.

Global e-commerce sales rose 27%, compared with 21% in the fiscal second and first quarter.

Analysts will be sifting through Walmart’s results and may seek more information from company executives regarding Trump’s proposed tariffs during a conference call Tuesday. Trump has vowed that he’ll put a 60% tariff on goods from China — and a tariff of up to 20% on everything else the United States imports.

Companies have already rerouted some production away from China, but an aggressive trade policy could accelerate those plans.

Shoe brand Steve Madden announced earlier this month that it will be be cutting the goods that it imports from China by as much as 45% next year.

For the current fiscal year, Walmart expects earnings per share in the range of $2.42 to $2.47. That’s up from its August projections for per-share earnings of between $2.35 and $2.43. Analysts expect $2.45 per share, according to FactSet.

The company also expects sales to increase by 4.8% to 5.1% for the year, up from a range of 3.75% to 4.75%.