Walmart raised its forecast on Tuesday as customers bought more discretionary goods, ordered more home deliveries and started their holiday shopping.

The discounter now expects full-year net sales to grow between 4.8% and 5.1%. That compares with the previous forecast of revenue growth of 3.75% to 4.75% for the period. The updated guidance came as Walmart posted third-quarter earnings and revenue that exceeded expectations.

In a CNBC interview, Chief Financial Officer John David Rainey says Said sales of general goods – outside the supermarket department – ​​grew year on year for the second quarter in a row, after declining for eleven consecutive quarters. Still, he says consumers are waiting to make these purchases until they see an attractive deal, especially as they pay more for food.

“We expect this holiday season to be very consistent with that,” he said. “They are focused on price and value.”

Here’s what the major retailer reported for the period, compared to Wall Street estimates, according to a survey of LSEG analysts:

• Earnings per share: 58 cents adjusted versus 53 cents expected
• Gain: $169.59 billion versus $167.72 billion expected

Walmart shares rose about 4% in premarket trading.

In the three-month period ending Oct. 31, Walmart’s net income rose to $4.58 billion, or 57 cents per share, compared with $453 million, or 6 cents per share, in the same period a year ago. Revenue increased from $160.80 billion in the same quarter last year.

Comparable sales, an industry measure also called same-store sales, rose 5.3% for Walmart and 7% for Sam’s Club, excluding fuel.

Customers visited Walmart’s U.S. stores and website more often and generally spent more compared to the previous year’s quarter. Walmart’s U.S. transactions rose 3.1% and the average ticket rose 2.1% year over year.

E-commerce sales rose 22% in the US, with gains coming from curbside pickup and delivery, along with growth in Walmart’s advertising and third-party marketplace businesses.

Walmart shoppers are also willing to pay more to receive their purchases faster, Rainey said. Over the past two quarters, 30% of customer orders in the US were charged an additional fee to deliver the order within a shorter time frame, such as within an hour or within three hours.

He said Walmart’s e-commerce business is “getting very close to profitability because we can leverage some of the delivery costs with these additional fees that customers are willing to pay for the convenience.”

Walmart, the nation’s largest retailer, released its latest sales results and read how American consumers are gauging sentiment and weighing the outlook for the most crucial shopping season of the year.

Retailers, including Walmart, are dealing with a mixed bag of factors this holiday season. Inflation has been moderate, with petrol prices falling and supermarket inflation remaining low year on year. Fears of a lengthy process to determine the winner of the US presidential race never materialized.

Still, President-elect Donald Trump’s proposal for tariffs on imports from China and other countries has fueled new concerns about a new surge in prices. The holiday season is also shorter this year and parts of the U.S. have had unseasonably warm weather, two dynamics that could hurt retailers.

Rainey said tariffs could force Walmart to raise prices, but said it’s too early to say which goods could become more expensive.

“We never want to increase prices,” he said. “Our model assumes everyday low prices. But there will likely be cases where prices for consumers will increase.”

He said about two-thirds of the items Walmart sells are made, grown or assembled in the U.S., which reduces tariff risk for those goods. And he added that Walmart, like other retailers, has tried to diversify where it imports goods.

“We’ve been living under a tariff environment for seven years, so we’re pretty familiar with that,” he said. “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.”

Holiday spending is expected to increase this year, but at a modest pace. The National Retail Federation, a retail trade group, expects holiday spending in November and December to rise 2.5% to 3.5% compared to 2023, to a range between $979.5 billion and $989 billion. That would be lower than the 3.9% annualized jump from the 2022 to 2023 holidays, when spending totaled $955.6 billion.

Rainey said the holiday season is “off to a pretty good start.”

He said items such as TVs, Apple AirPods, Beats headphones and even tires have been sold. On the other hand, purchases of clothing and other weather-related purchases, such as space heaters, were slower due to unseasonably warm weather in parts of the country.

Some of the overall merchandise gains indicate that consumers are feeling relief from inflation, but some also have to do with Walmart’s strategy, he said. The company has expanded its range of toys, home goods and more through its third-party marketplace.

As of Monday’s close, Walmart shares are up nearly 60% this year, more than the S&P 500’s gain of about 24% over the same period. Shares of Walmart closed Monday at $84.08, bringing the company’s market value to $675.86 billion.