NEW YORK (AP) — Walmart on Tuesday reported another quarter of strong results, as its low prices attracted shoppers looking for deals in an economically challenging environment marked by bouts of inflation.

Yet inflation is fading, resulting in Walmart customers spending less per trip, leading the company to release a modest earnings forecast.

Walmart also said it is buying smart TV maker Vizio for $2.3 billion to boost its advertising business. The deal gives Walmart access to Vizio’s SmartCast operating system, which would allow Walmart to offer its suppliers the ability to display ads on streaming devices. Walmart said Vizio’s SmartCast system has 18 million active accounts. The Wall Street Journal was the first to report last week that a deal was in the works.

In addition, Walmart announced its biggest dividend hike in more than 10 years.

The American consumer has remained resilient, bolstered by a strong labor market and steady wages. But shoppers pulled back on spending in January after the holiday season splurge.

Walmart, based in Bentonville, Arkansas, is among the first major U.S. retailers to report quarterly results that could shed more light on how consumers are feeling, particularly after the government reported a significant decline in consumer spending last month.

Home Depot reported Tuesday that sales continued to fade during the fourth quarter as the country’s largest home improvement retailer feels the impact of high mortgage rates and inflation.

Economists attributed part of the pullback to snowy weather conditions, but also believe that Americans may finally be buckling under higher interest rates and other financial burdens, which would have consequences beyond Walmart. Consumer spending accounts for roughly two-thirds of U.S. economic activity.

Walmart has used its clout to work with suppliers to manage inflation. CEO Doug McMillon told industry analysts Tuesday that general merchandise prices are lower than a year ago and even two years ago in some categories. It is mixed in the grocery, with eggs, apples and deli snacks cheaper than last year, and prices for asparagus and blackberries rising.

Dry grocery and consumables like paper goods and cleaning supplies are up in the mid-single-digit percentages compared with last year and high teens versus two-years ago, McMillon said.

Walmart’s Chief Financial Officer John David Rainey told The Associated Press in a phone interview Tuesday that items priced at a couple hundred dollars, like TVs and computer, are still tough, and shoppers are delaying their purchases.

But Walmart is also drawing households that make more than $100,000 a year. Two thirds of Walmart’s market share gain in general merchandise comes from that latter group.

Walmart earned $5.49 billion, or $2.03 per share in the quarter ended Jan. 31. That compares with $6.27 billion, or $2.32 per share in the year ago quarter. Adjusted earnings were $1.80 per share.

Sales rose 5.7% to $173.39 billion.

Analysts were expecting $1.64 per share on sales of $170.85 billion, according to FactSet.

Comparable store sales — those from established stores and online operating over the past 12 months — rose 4%, slower than the 4.9% for the Walmart U.S. division in the previous quarter. They rose 6.4% in the second quarter. Global e-commerce sales were up 23%, compared to 15% in the previous quarter.

But the average ticket— how much shoppers spent per trip — slipped 0.3% in the latest quarter from a year ago, even as the number of transactions rose 4.3%. It’s good news that inflation is coming down, but that’s a headwind for the company.

“With general merchandise being more deflationary, we’ve got to sell more units because of lower prices overall,” Rainey said.

The company’s global advertising business increased roughly 28% to reach $3.4 billion.

Walmart recently announced plans to build or convert more than 150 stores in the next five years, while remodeling existing stores.

That is a notable shift. In 2016, Walmart said it was slowing new store openings as it shifts some of its focus to online sales and technology to counter Amazon. Walmart hasn’t opened a new store since late 2021.

But it’s clear that Walmart is highly focused on stores and last month sweetened perks for its U.S. store managers.

Walmart said that starting with the company’s current fiscal year, U.S. store managers would receive up to $20,000 in Walmart stock grants every year.

The retailer expects earnings per share to be in the range of $1.48 to $1.56 for the first quarter. Analysts were expecting a $1.60 per share. It anticipates net sales to increase 4% to 5%.

Walmart expects earnings for the current fiscal year to be between $6.70 and $7.12 per share. Analysts were expecting $7.06, according to FactSet. The company expects sales to be up 3% to 4% for the year, slower than the previous year.

“There are economic outcomes that could cause us to move to the high-end of the range or the low-end of the range, but given where we are right now, going into the first part of this year, we feel really good about the plan,” Rainey said.

Walmart’s shares rose more than 3%, or $5.50, to $175.86 on Tuesday.

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This story has been updated to correct Walmart’s fourth-quarter revenue. It reported $173.39 billion, not $173.38.