By Ananya Mariam Rajesh
(Reuters) -Walmart on Tuesday raised its annual sales and profit forecast for the third time in a row, with people buying more groceries and merchandise online and in stores, a sign it may be gaining market share ahead of the holiday season.
Shares of Walmart, which are up nearly 60% this year, rose about 4% in premarket trading on Tuesday.
The retailer is one of the first major U.S. chains to provide insight into the key holiday quarter and how consumers plan to spend as inflation subsides.
“In the U.S., in-store volumes grew, in-store pickup grew faster and in-store delivery grew even faster,” said Walmart CEO Doug McMillon.
Although inflation has not made much progress in recent months, it is on a downward trend, increasing purchasing power. Walmart said it saw market share increases across income cohorts, led primarily by upper-income households earning more than $100,000 in annual income.
The retail whistleblower now forecasts consolidated net sales to rise 4.8% to 5.1% in fiscal 2025, compared to previous expectations of 3.75% to 4.75% growth.
It also expects annual adjusted earnings per share to be between $2.42 and $2.47, compared to its previous forecast of $2.35 and $2.43.
Retailers including Walmart, Amazon.com and Target started the holiday shopping season earlier than usual, offering deals on everything from toys to home goods.
Walmart and Target stocked more private label brands and expanded their grocery offerings as consumers look to buy essentials and gifts at the lowest possible price.
“The majority of our customers maintain their vacation plans year after year, amid the election, calendar shift and economic backdrop,” Walmart said.
Republican Donald Trump’s victory in the 2024 U.S. presidential election could weigh on some shoppers, said Minkyung Kim, an assistant professor of marketing at Carnegie Mellon University’s Tepper School of Business.
Trump’s tariffs, if implemented in 2025, could raise prices on clothing, toys, furniture, appliances, shoes and travel items, especially on items where China is a major supplier, according to the National Retail Federation, a U.S. trade group of companies. of which the American head of Walmart is the chairman.
“We’ve been living under a tariff environment for seven years, so we’re pretty familiar with that,” CFO John David Rainey said in an interview with CNBC.
“However, rates are inflationary for customers, so we want to work with suppliers and with our own private label range to try to bring prices down.”
