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Walmart Defies Gloom Over Inflation With Sales and Profit Upgrade

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Walmart can be a bellwether for the retail industry, providing a touch at what earnings might seem like for Goal, Macy’s and others that report this week.

Home Depot, for its part, also reported on Tuesday that sales and profits last quarter were stronger than analysts expected, with higher prices offsetting a decline in transactions. It stuck with its forecast for modest earnings growth within the fourth quarter and it expected comparable sales for the quarter to be the bottom it could have all yr.

Analysts focused on how trends within the U.S. home market were affecting Home Depot’s business, much of which is tied to home improvement projects. The Federal Reserve’s actions to deal with inflation by raising rates of interest has made it dearer for Americans to borrow to purchase homes.

“We’ve remained incredibly bullish. There are definitely aspects outside of our control,” Ted Decker, Home Depot’s chief executive, said on Tuesday in a call with analysts. He added that he, like many others, was wrestling with the likelihood that the Fed’s actions might take the U.S. right into a recession, and in that case, how deep it is likely to be.

Americans are feeling more uncertain in regards to the economy this holiday season compared with last yr’s. In turn, Walmart, like other retailers, has been testing out ways to capture shoppers’ dollars earlier within the season, by pushing deals ahead of the same old timeline. It has also sweetened the perks for members of its subscription program, including the choice to have returns picked up at their doorsteps. And it has lengthened the window for when all shoppers can return a purchase order.

Strong food sales are a promising sign for a way Walmart will perform in the course of the fourth quarter, in keeping with Neil Saunders, a retail analyst who’s managing director of GlobalData. Despite rapid food inflation, Walmart didn’t raise prices on traditional Thanksgiving items; a turkey can be lower than a dollar a pound, Mr. McMillon said.

“We expect this to be a serious draw over the period,” Mr. Saunders said in an emailed statement. “Non-food sales may struggle a bit, but our sense is the early begin to discounting and promotion will help.”

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