Walmart is thriving as consumers shift their spending habits, propelling its stock to a record high. This year, Walmart’s stock has surged 29%, outperforming competitors like Target and Home Depot.

Walmart’s recent quarterly earnings surpassed Wall Street expectations, reporting $169.3 billion in revenue. Following these results, the company raised its full-year sales growth forecast. They now expect an increase of up to 4.75%, with earnings growth projected between 6% and 9%. The stock rally boosted the broader market, with The Dow Jones Industrial Average and S&P 500 futures rising nearly 1%.

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Walmart, the largest retailer in the U.S., reflects broader consumer trends and remains steady through various economic conditions. Last quarter, Walmart’s U.S. sales increased 4.2%, while digital sales surged 22%. Operating income also rose by 8.5%. CEO Doug McMillon attributes this success to Walmart’s focus on value, which is critical as consumers face ongoing financial pressures.

Walmart has leveraged its pricing advantage, with prices averaging 25% lower than traditional supermarkets. The company has also introduced price reductions on 7,200 items to maintain customer loyalty.

“We aren’t experiencing a weaker consumer overall,” McMillon said in an earnings call. “Customers from all income levels are looking for value, and we have it.”

As inflation causes consumers to rethink luxury purchases like $6 Starbucks coffees and $15 McDonald’s meals, many are turning to Walmart for groceries and essentials. While inflation has eased slightly, financial pressures remain high, driving shoppers toward more economical options.

Walmart has also expanded its customer base, gaining market share with higher-income households. The company’s scale and profitability from higher-margin businesses like advertising have allowed it to reduce prices further. Analyst Michael Baker told CNN, “The only place anyone is shopping right now is Amazon, Walmart, and Costco,” emphasizing the retailer’s value-driven strategy.

Walmart’s stock rally has added nearly $50 billion in market capitalization, about three-fourths of rival Target’s total market value. As consumer spending continues to shift, Walmart’s performance remains a key indicator of economic resilience.