(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 2% in premarket trading on Tuesday.

The retailer is one of the first major U.S. chains to provide insight into the important holiday quarter and how consumers are planning their spending 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 for fiscal 2025 to rise 4.8% to 5.1%, 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.

MORE BUYING POWER

In the third quarter ended Oct. 31, Walmart’s U.S. comparable sales rose 5.3%, better than analysts’ expectations of a 3.61% increase, according to data compiled by LSEG. Sales grew across all categories, including the general goods segment, which had suffered declines for more than two years due to persistent inflation.

Walmart also posted comparable sales growth in its health and wellness category, helped by strong demand for GLP-1, or weight-loss drugs.

As purchasing power increases, analysts expect that upper- and middle-income consumers will especially reduce the shift in spending on non-essential, nice-to-have merchandise.

The company has invested billions in automation across its supply chain to stock fresher products and improve delivery times as consumers increasingly prefer the convenience of online grocery shopping.

Story continues