NEW YORK (AP) — Walmart is heading into the official start of the holiday shopping season with strong tailwinds after ratcheting up better-than-expected fiscal third-quarter sales in many items including toys, home goods and groceries.

The robust results, announced Tuesday, underscore how Walmart's comparatively low prices have become a powerful draw for shoppers seeking to cut spending where they could in a still inflationary environment.

The nation’s largest retailer, based in Bentonville, Arkansas, also raised its outlook. The company's shares rose more than 4%, or $3.67, to $87.75 in morning trading, after reaching an all-time high of $88.29 earlier.

“We’re encouraged by the steady momentum building across the business,” Walmart's Chief Financial Officer John David Rainey told analysts during Tuesday's earnings call.

Walmart is among the first major U.S. retailer to report quarterly results and provides a peek into how Americans are feeling as they head into the holiday season. Rainey told The Associated Press during a call on Tuesday that shoppers are spending more on food than general merchandise, and they're becoming more discerning when it comes to big-ticket items like TVs.

One of the most challenging parts of the business has been the clothing business, dragged down by unseasonably warm weather that has made it hard to sell sweaters and coats, Rainey said.

Industry analysts expect consumers to show up in force, though sales may not meet last year spending levels by Americans.

A post-pandemic inflation spike sent prices about 20% higher overall compared with three years ago and it soured Americans’ outlook on the economy, a key reason given by voters for sending Donald Trump back to the White House.

Yet even as many complained of how costs have strained household budgets, strong consumer spending continues to drive steady growth in the U.S. economy. Retail sales rose 0.4% from September to October, the Commerce Department said Friday, a solid increase though it was half of the previous month’s jump.

Walmart reported net income of $4.58 billion, or 57 cents per share, in the three months ended Oct. 31. That compares with $4.53 billion, or 6 cents per share, in the year-ago period.

Adjusted earnings were 58 cents per share, 5 cents better than Wall Street had expected, according to a survey by FactSet.

Sales rose 5.5% to $169.59 billion, up from $160.8 billion in the year-ago period, and also easily beat analyst projections.

Comparable store sales — which include online and stores open for the past 12 months — rose 5.3% in the U.S. That is an acceleration from the 4.2% jump in the U.S. in the second quarter and 3.8% in the first quarter.