On Thursday, Walmart, the world’s largest retailer, released its third-quarter earnings report, showing that US consumers are increasingly focused on finding good value — and the company is clearly benefiting from that shift.

The report showed that Walmart’s third-quarter revenue rose 5.8% to US$179.5 billion, beating expectations of US$177.43 billion. Net income climbed 29% to US$6.1 billion.

Walmart now expects full-year sales to grow by 4.8%–5.1%, higher than its previous forecast of 3.75%–4.75%. It also raised its full-year earnings-per-share (EPS) guidance to US$2.58–US$2.63.

The company noted that while it has seen some pullback in spending among lower-income shoppers — particularly toward the end of the quarter — overall it is still gaining market share, with the most significant growth coming from higher-income customers.

In the three months to 31 October, comparable sales in Walmart’s US business rose 4.5%. The company simultaneously raised its full-year outlook for both sales and profit.

As the largest US retailer by revenue, Walmart’s resilient performance suggests that in an environment of cautious economic sentiment and years of elevated prices, consumers are still willing to spend — as long as they feel they are getting good value. Walmart said its in-store prices were up 1.3% year-on-year in the quarter, below the 3% overall US inflation rate in September.

The company’s Chief Financial Officer pointed out that sales had come under pressure following the federal government’s reduction of funding for the Supplemental Nutrition Assistance Program (SNAP), but this did not derail the quarter’s overall performance.

Market commentary:

Walmart has been working hard to keep prices under control. The company has absorbed part of the increase in costs while passing some of it on to consumers. Price increases have mainly been concentrated in imported categories such as electronics and patio furniture.

At the same time, Walmart has expanded its coverage of rapid-delivery online orders fulfilled within a few hours, which now reach 95% of US households. Combined with strong growth in its advertising business, e-commerce sales surged 27% year-on-year in the quarter.

Walmart CEO Doug McMillon said, “We are improving delivery speeds and managing inventory efficiently. We are well prepared for a strong finish to this year and beyond.”