By Sarah Nassauer

Eggs. Coffee. Gas. The prices Americans pay for many everyday items have been stubbornly high. That has been surprisingly good for Walmart.

The discount retailer and country's biggest grocer -- best known for its "everyday low prices" slogan -- has been drawing in shoppers of all stripes amid high inflation. They have come to Walmart searching for its store brand eggs, holiday toys and even to pick up weight-loss medicines at the pharmacy counter.

The dynamic boosted U.S. profit and sales at Walmart during the holiday quarter, including a 20% jump in its ecommerce business. The quarterly results -- $180.6 billion in total revenue and $7.9 billion in operating income -- met Wall Street's elevated expectations.

The gains extend a post-pandemic streak that has pushed the company's stock price near all-time highs and lifted its market valuation above $800 billion this year.

Walmart has used its negotiating power with suppliers to offer lower prices than smaller competitors; and its heft to invest in store pickup and grocery delivery services that have helped it take market share from weaker competitors such as Target and dollar-store chains.

"We have momentum driven by our low prices, a growing assortment, and an ecommerce business driven by faster delivery times," Chief Executive Doug McMillon said in a statement. "We're gaining market share, our top line is healthy, and we're in great shape with inventory."

The strategy will be tested this year after the Trump administration imposed fresh tariffs on many goods that Walmart imports from China and has pledged to add tariffs that would boost costs on goods from elsewhere.

To start the year, executives set targets for 2026 that are similar to the goals they set to start 2025 -- where revenue ended up rising 5.1% and operating income rose 8.6%. They are expecting fiscal 2026 revenue growth of 3% to 4% and operating income improving at a faster clip than sales.

Walmart said it was seeing broad-based gains with American shoppers looking for deals, especially among higher-income households, a group Walmart defines as households that earn $100,000 a year or more. That gain was especially strong for non-grocery items.

Those gains came as prices in the U.S. ticked up at Walmart, especially for frequently bought items such as eggs, and more shoppers embraced the retailer's store brands compared with last year, the company said. Store brands are generally priced lower than national brands.

Walmart's U.S. comparable sales, those from stores and digital channels operating for at least one year, rose 4.6% in the three-month period ended Jan. 31. Wall Street analysts expected a 4.4% gain in that closely watched metric.

Write to Sarah Nassauer at Sarah.Nassauer@wsj.com

(END) Dow Jones Newswires

February 20, 2025 07:02 ET (12:02 GMT)

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