(Reuters) – Walmart raised its sales and profit forecast for the second time this year on Thursday as Americans continued to buy low-cost essentials.

Walmart shares were up 6.4% in premarket trading, on track to open at a record high.

It has risen 30.7% since the start of the year, outpacing the S&P 500 index’s 14.4% gain.

Walmart is the first major U.S. retailer to report quarterly results, which provide a snapshot of consumer sentiment as government data showed an unexpected deterioration in the jobs market that has stoked fears of a recession.

Walmart’s results suggest that consumer spending remains resilient despite several years of above-average inflation.

According to the U.S. Department of Labor, inflation is slowing as consumer prices fell in July.

Walmart said its quarterly sales were supported by strong demand for fresh produce and high-quality meats.

The retailer reported a 22% increase in U.S. online sales, driven largely by a 50% increase in store deliveries.

“The U.S. consumer appears to be in a stable position compared to the start of the year, which is encouraging given fears of an impending slowdown,” said Arun Sundaram, an analyst at CFRA Research.

Investments in modernizing its stores and services have allowed Walmart to gain market share against competitors such as Target.

“Walmart’s significant investments in pricing, store quality, technology and supply chain have allowed the company to continue to gain market share, likely offsetting what we perceive as a slower consumer environment,” said Scot Ciccarelli, an analyst at Truist Securities.

Walmart forecast full-year adjusted earnings per share of $2.35 to $2.43, compared with its previous forecast of the high end of $2.23 to $2.37 per share.

Consolidated net sales for the 2025 financial year are expected to increase by 3.75% to 4.75%, while previous forecasts were for growth of 3% to 4%.

(Siddharth Cavale in New York and Savyata Mishra in Bangalore; Leo Marchandon)

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