Although the nation has been hit with various challenges, like the uncertain state of a constantly evolving economy, inflation, the U.S. port strikes, and two devastating hurricanes, Walmart still prevailed in its most recent quarter against all odds.
The retail giant has managed to navigate customers' more cautious spending and stayed at the forefront of their minds by offering low prices that provide value and give them more for their money.
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Walmart has also distinguished itself from the competition by making it more convenient for customers to shop for all of their necessities. Its physical and online store provides fast delivery and pick-up options, which has allowed the company to attract new customers, including those with more spending power.
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As the company stated in its earnings call, lower-income families continue to choose Walmart over other retailers, and more upper-income families are starting to shop at Walmart rather than its competitors.
"We're seeing higher engagement across income cohorts with upper-income households continuing to account for the majority of our share gains," said Walmart Executive VP & CFO John David Rainey.
Walmart surpasses analyst expectations, reports outstanding growth
According to Walmart's third-quarter earnings report for 2025, total revenues increased by 5.5% to $169.6 billion compared to the same time last year, surpassing analysts' expected $167.5 billion.
Same-store sales in Walmart U.S. grew by 5.3% versus last year, exceeding analysts' predicted 3.81%.
E-commerce sales were up 43% internationally and increased by a shocking 22% in Walmart U.S., surpassing analysts' low estimates of 2.22%.
Related: Walmart says this Trump trade policy could lead to higher prices
According to Walmart, efficient pick-up and delivery services led to this massive growth, along with a 50% increase in overall advertising business and innovative marketplace strategies.
The company attributed its profitable sales to its grocery category, which grew to the highest level in four years and comprised 60% of Walmart's U.S. sales.
Walmart reported earnings per share (EPS) of $0.58, outdoing analysts' expectations of $0.53.
How Walmart has managed to stay at the top of its game while Target struggled
Although Walmart has been on cloud nine after reporting outstanding earnings, one of its competitors is not doing as well.
Like Walmart, Target has an online presence and a physical shopping experience with pick-up and delivery options. The retailer has also begun reducing prices on various items and focusing on providing a more affordable shopping experience.
However, all its efforts have not been as successful as Walmart's, as Target's third-quarter earnings completely missed analysts' expectations while reporting multiple declines.
Target's net sales are still up 1.1% yearly to $25.70 billion, almost matching analysts' expected $25.74 billion, and its same-store sales declined 1.9%.
EPS declined 11.9% to $1.85, missing analysts' estimated $2.30.
These unfavorable results caused its shares to drop over 21% during Wednesday's opening market hours.
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During its earnings call, Target didn't give an exact explanation for the decline of its business. Still, it did emphasize that customers' more cautious spending has attributed to decreased sales in specific categories.
Head of Analytical Research at Placer.ai, R.J. Hottovy, also agreed with Target's noted consumer behavior, stating:
"We’re operating in an environment where many consumers are focused on stretching their household budgets and prioritizing stores offering the best deals."
However, their different approaches to providing value made the difference between them.
"While Target has reduced prices on everyday essentials, Walmart’s price rollbacks and assortment updates in general merchandise... seem to have resonated more with consumers this past quarter," said Hottovy.
As for its fourth-quarter outlook, Target (TGT) kept numbers below analysts' predicted guidance, expecting flat comparable sales and EPS of $1.85 to $2.45, below analysts' expected $2.65.
Walmart increases outlook for its upcoming fiscal quarter
Although Walmart (WMT) warned investors that Trump's trade policy could lead to higher prices and potentially hurt its business, the outstanding growth reported in its third-quarter earnings made Walmart optimistic about its continuous growth, causing the company to raise its guidance for fiscal 2025.
Walmart now expects net sales to grow around 4.8% to 5.1% compared to its last guidance increase of 3.75% to 4.75%.
EPS for the full fiscal year is now expected to be around $2.42 to $2.47, compared to its previous guidance of $2.35 to $2.43.
This is the third time Walmart has increased its outlook for fiscal 2025. This time, they attribute this revision to the successful start of its holiday sales season, which aligns with its expectations thus far.
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