Walmart raises its forecast once more due to increased spending by customers beyond the grocery sections.

• Walmart topped third-quarter earnings and revenue expectations.
• The retailer revised its outlook upward due to increased e-commerce sales and enhanced performance in general merchandise.

On Tuesday, its customers increased their purchases of discretionary merchandise, ordered more deliveries to their homes, and began their holiday shopping, leading to an increase in the company's forecast.

Walmart's third-quarter earnings and revenue surpassed expectations, leading the discounter to revise its full-year sales growth forecast from 3.75% to 4.75% to between 4.8% and 5.1%.

In a CNBC interview, John David Rainey, the Chief Financial Officer, stated that sales of general merchandise, excluding groceries, increased year over year for the second consecutive quarter. Despite this, he noted that consumers are delaying their purchases until they find a compelling deal, particularly as they continue to pay higher prices for food.

"This holiday season is expected to be consistent with the previous one," he stated. "Their focus is on pricing and offering value."

According to a survey of analysts by LSEG, the big-box retailer's reported results for the period differed from Wall Street's estimates.

• Earnings per share: 58 cents adjusted vs. 53 cents expected
• Revenue: $169.59 billion vs. $167.72 billion expected

In the three months that ended October 31st, Walmart's net income increased to $4.58 billion, or 57 cents per share, compared to $453 million, or 6 cents per share, in the previous year. Additionally, revenue grew from $160.8 billion in the previous quarter.

The sales growth rate for Walmart and Sam's Club, excluding fuel, was 5.3% and 7%, respectively.

In the U.S., customers visited Walmart's stores and website more frequently and spent more money than in the previous quarter. Walmart U.S. transactions increased by 3.1%, and the average ticket price also increased by 2.1% year over year.

In the U.S., e-commerce sales increased by 22%, driven by curbside pickup, home delivery, and growth in Walmart's advertising and third-party marketplace businesses.

U.S. consumers are gauging sentiment and weighing the outlook for the most crucial shopping season of the year as Walmart, the nation's largest retailer, delivered its latest sales results.

This holiday season, retailers, including Walmart, are facing a variety of factors. While inflation has decreased, with gas prices dropping and grocery prices remaining stable, there were no prolonged disputes over the U.S. presidential election outcome.

The holiday season is shorter this year and parts of the U.S. have had unseasonably warm weather, two dynamics that could hurt retailers. Additionally, President-elect Donald Trump's proposal for tariffs on imports from China and other countries has fueled fresh concerns about prices rising again.

Walmart may increase prices due to tariffs, but it's not yet clear which merchandise will be affected, according to Rainey.

"Our model is everyday low prices, but there may be instances where prices will increase for consumers."

Walmart sells two-thirds of its items in the U.S., which reduces the tariff risk for those goods. Additionally, Walmart, like other retailers, has been trying to diversify where it imports goods.

"We've been living under a tariff environment for seven years, so we're well-versed in it. However, tariffs can increase prices for customers, so we plan to collaborate with suppliers and our own private brand selection to lower prices."

Despite a slight increase, holiday spending is predicted to rise at a moderate pace this year. The National Retail Federation anticipates that spending in November and December will increase by 2.5% to 3.5% compared to 2023, totaling between $979.5 billion and $989 billion. This is lower than the 3.9% year-over-year jump from the 2022 to 2023 holiday season, when spending reached $955.6 billion.

The holiday season has begun well, according to Rainey.

While TVs, Apple AirPods, Beats headphones, and even tires have been selling well, clothing and other weather-dependent purchases like space heaters have been slower due to unseasonably warm weather in certain regions.

The increase in sales of general merchandise suggests that consumers are experiencing relief from inflation, but it may also be due to Walmart's strategy of expanding its product offerings through its third-party marketplace.

On Monday, Walmart's shares closed at $84.08, bringing the company's market value to $675.86 billion. This year, Walmart's shares have increased by nearly 60%, surpassing the S&P 500's approximately 24% gains during the same period.