Some retailers are warning about shoppers pulling back on spending heading into the holiday season. Not Walmart.
Executives at the big-box chain said on an earnings call Thursday that smaller sales events so far in the second half of 2025, from back-to-school deals to Halloween, have pointed to strong holiday sales.
“Everything that we’ve seen so far makes us optimistic and encouraged about customers and members leaning into the seasonal events and holiday shopping period,” CFO John David Rainey said.
Walmart reported third-quarter same-store sales that were above analysts’ expectations on Thursday. The chain has benefited as upper- and middle-income shoppers continue to visit Walmart stores, CEO Doug McMillon said.
That’s a more upbeat outlook than other retailers have provided lately.
Chains from Home Depot to McDonald’s have warned in their latest earnings reports that even middle- and high-income shoppers have been pulling back. Low-income shoppers, meanwhile, are feeling as squeezed as ever.
And while the National Retail Federation, a trade group for retailers, expects sales this holiday shopping season to hit $1 trillion for the first time, the group still anticipates slower sales growth than the 2024 holiday season.
Part of Walmart’s optimism comes from its size, David Silverman, senior director at Fitch Ratings, said in a note after Walmart released its earnings report.
Walmart’s scale — spanning thousands of stores, an online business, and a distribution network — means it can minimize the effect of President Trump’s tariffs, Silverman said.
John Furner, who will become Walmart’s CEO next year, said Thursday that the retailer has “seen less impact than we would have expected early in the year” from tariffs.
It can also keep prices lower than rivals — something that has bolstered sales, including from customers more affluent than Walmart’s target audience who are trying to save money.
“Walmart is not immune from the current volatile environment, as it sees some spending pullback and choicefulness from lower-income cohorts, although it is benefiting from trade-down by upper-end customers,” Silverman wrote.
CFO Rainey said that Walmart is still seeing lower-income consumers limit their spending. “There’s certainly some pockets of moderation that we’re keeping an eye on,” Rainey said.
There’s also the question of what happens in the new year once holiday spending ends: The first quarter tends to be the slowest sales season for many retailers and consumer brands.
For now, Walmart’s results show that consumers are “bifurcated,” Zacks Investment Research analyst Bryan Hayes wrote on Thursday.
“Value-oriented giants thrive by attracting diverse income groups, while discretionary-focused peers like Target face headwinds,” Hayes wrote.
