On Tuesday, Walmart Inc forecasted a smaller decline in annual profit as demand for groceries rises despite higher prices. At the same time, discounts on electronics and clothing attract more inflation-hit shoppers to the top US retailer’s stores.

Walmart raised its full-year net sales expectations and announced a new USD 20 billion share buyback plan, causing its shares up 7 per cent in premarket trading.

Average transactions at its Walmart US business increased 2.1 per cent in Q3 ended, compared with a 1 per cent increase last quarter, while average bills increased 6 per cent, mainly due to inflation.

Walmart’s inventories are valued at nearly USD 65 billion, up from about USD 60 billion three months ago. Chief Financial Officer John David Rainey reported that inflation drove the 13 per cent rise in the value of the inventories.

The company also forecast holiday quarter US same-store sales to rise about 3 per cent, down from estimates of a 3.4 per cent rise. Q4 adjusted earnings per share for Walmart are expected to drop 3 per cent to 5 per cent, compared to analysts’ estimates of a 4.5 per cent decline.