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 in the fourth quarter and it expected comparable sales for the quarter to be the lowest it would have all year.
Analysts focused on how trends in 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 address inflation by raising interest rates has made it more expensive for Americans to borrow to buy homes.
“We have remained incredibly bullish. There are certainly factors 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 possibility that the Fed’s actions might take the U.S. into a recession, and if so, how deep it might be.
Americans are feeling more uncertain about the economy this holiday season compared with last year’s. In turn, Walmart, like other retailers, has been testing out ways to capture shoppers’ dollars earlier in the season, by pushing deals ahead of the usual timeline. It has also sweetened the perks for members of its subscription program, including the option to have returns picked up at their doorsteps. And it has lengthened the window for when all shoppers can return a purchase.
Strong food sales are a promising sign for how Walmart will perform during the fourth quarter, according to Neil Saunders, a retail analyst who is managing director of GlobalData. Despite rapid food inflation, Walmart did not raise prices on traditional Thanksgiving items; a turkey would be less than a dollar a pound, Mr. McMillon said.
“We expect this to be a major draw over the period,” Mr. Saunders said in an emailed statement. “Non-food sales may struggle a bit, but our sense is the early start to discounting and promotion will help.”
Walmart is not immune to the shaky economic outlook, which led the retail giant to be more conservative in its approach to the holiday season. It said it would hire fewer seasonal workers this year. The uncertainty also factored into how executives were thinking about 2023.
“We know some of the unanticipated costs experienced this year shouldn’t repeat next year,” John David Rainey, Walmart’s chief financial officer, said on a call with analysts. “That said, we’re planning our business with the assumption that inflation continues somewhat elevated.”