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NEW YORK (AP) — Walmart had another quarter of strong sales that topped almost all expectations with its comparatively low prices proving a powerful draw for millions who have struggled with rising costs for housing, groceries and almost everything else.

The nation’s largest retailer also raised its full-year outlook in a sign of confidence of its business model.

Walmart Inc. reported earnings of $4.5 billion, or 56 cents per share, in the three months ended July 31. That compares with $7.9 billion, or 97 cents per share, in the same period last year. Adjusted per share earnings were 67 cents, or 2 cents better than Wall Street had expected, according to FactSet.

Sales rose nearly 4.8% to reach $169.33 billion, also beating expectations.

Comparable store sales — which include online and stores open for the past 12 months — rose 4.2% in the U.S. That compares with 3.8% in the first quarter, and 4%, in the fourth quarter

Global e-commerce sales rose 21%, matching the first quarter's pace.

The number of transactions, and the average amount customers spent during each of those transactions at Walmart, was higher than it was during the same three months last year.

And in a potentially encouraging shift, Walmart said sales of discretionary items like clothing and electronics was flat to very slightly positive. Americans for two years have maintained a laser-like focus on the essentials, taking a pass on goods that are not essential, and spending that money instead on groceries and other basics.

Before the opening bell Thursday, shares of Walmart surged 6%, pulling along with it the Dow Jones Industrial Average.

Walmart, based in Bentonville, Arkansas, is among the first major U.S. retailers to report quarterly results and provides a peek into how Americans are feeling about their spending power with signs that the red-hot U.S. economy may finally be cooling.

Hiring by U.S. employers fell surprisingly sharply in July and the unemployment rate rose for the fourth straight month with higher interest rates taking a toll on businesses and households. The strong U.S. economy has been a main driver of global economic growth and the U.S. jobs market has given Americans the financial wherewithal to keep spending.

The Labor Department said Wednesday that year-over-year inflation reached its lowest level in more than three years in July, the latest sign that the worst price spike in four decades is fading and setting up the Federal Reserve for an interest rate cut in September. But that doesn’t mean prices have come down as a whole, and consumers are still struggling.

The impact of those higher costs has begun to manifest itself in the performance of U.S. retailers and their sales.

Home Depot reported quarterly results Tuesday and noted that customers continue to rein in spending.

Walmart has stepped up discounts and during the most recent quarter, Walmart had 7,200 price rollbacks.. There was a 35% increase in the number of rollbacks on food items at Walmart.

In July, Walmart launched its biggest store-label food brand in 20 years in terms of the breadth of items, hoping to reach younger customers who are not loyal to grocery brands and are seeking to cut spending on the grocery bill. Walmart said it expects to have a total of 300 products under the Bettergoods label by the fall ranging from frozen foods and dairy, to coffee and chocolate.

For back-to-school, Walmart retooled its 30-year-old brand called No Boundaries. to cater to Gen Z customers. The retooling of the No Boundaries label is part of a strategy to get customers to think of Walmart as a place to buy cool clothes, along with groceries .

For the year, Walmart said it now expects earnings per share to be in the range of $2.35 to $2.43. That's up from its previous estimate of $2.23 per share to $2.37 per share. Analysts projected $2.44 per share, according to FactSet.

The retailer is projecting annual sales to be up anywhere from 3.75% to 4.75%. It had previously expected sales would rise 3% to 4%.