BENTONVILLE, ARK. — Food prices are finally falling. C. Douglas McMillon, president and chief executive officer at Walmart Inc., said he is expecting “a period of deflation in the months to come” in the United States, adding, “while that would put more unit pressure on us, we welcome it because it’s better for our customers.”

“In the US, pricing levels in many food categories continue to be a concern,” Mr. McMillon said during a Nov. 16 earnings call. “Overall, our product costs are up versus last year, and they remain up even more on a two-year stack, which is putting pressure on our customers. Meat prices are high, but we’re happy to see lower pricing in dairy, on eggs and with chicken and seafood. The pockets of disinflation we are seeing are helping, but we’d like to see more faster, especially in the dry grocery and consumables categories.”

Later in the call, he added, “If the food prices come down in dry grocery and consumables and we start seeing deflation in those categories, that will free up dollars to be spent in general merchandise.”

Net income attributable to Walmart in the third quarter ended Oct. 31 was $453 million, equal to 17¢ per share on the common stock, which compared with a loss of $1.8 billion in the prior-year period. Items affecting comparability included gains and losses on equity and other investments and legal charges related to an opioid settlement. Adjusted earnings per share increased to $1.53 from $1.50 the year before when excluding those items.

Total revenues increased 5.2% to $160.8 billion from $152.81 billion.

“While we’re pleased with our top-line results, operating income was below our guidance due to higher-than-anticipated expenses, largely certain legal accruals,” said John D. Rainey, chief financial officer. “Constant currency sales increased 4.4%, or nearly $7 billion. Importantly, we saw traffic growth across both in-store and digital channels. All three operating segments experienced mid-single-digit sales growth with comp sales for Walmart US up 4.9% and Sam’s Club US up 3.8%, excluding fuel. International grew sales 5.4% in constant currency with Walmex sales up more than 9% and China up 25% with strong performance in Sam's Club and e-commerce.”

He noted the company grew share in Walmart US grocery “where we delivered positive comps and saw strong share gains in both units and dollars. Grocery inflation moderated nearly 300 basis points from Q2 levels to a mid-single-digit increase versus last year. But on a two-year stack, it was still elevated at a high-teens percentage.”

Net income for the nine months ended Oct. 31 totaled $10.01 billion, equal to $3.72 per share, up 85% from net income of $5.41 billion, or $1.98 per share, in the comparable period. Adjusted earnings per share equaled $4.85, up from $4.57. Total revenues year to date advanced 6.1% to $474.74 billion from $447.24 billion.

“Sales during November have turned higher as unseasonal weather abated and we kicked off holiday events,” Mr. Rainey said. “So sales have been somewhat uneven, and this gives us reason to think slightly more cautiously about the consumer versus 90 days ago.

“We still expect sales growth to moderate in Q4 versus prior quarters as grocery inflation further normalizes towards historic levels. And we're encouraged by the increased traffic and share gains we've seen and expect them to continue.

“As such, we're modestly raising our full-year sales guidance to 5% to 5.5% from 4% to 4.5% previously, primarily to reflect Q3's outperformance. For operating income, we're maintaining the guidance range of 7% to 7.5% growth, in addition to the 40 basis points of unexpected legal expenses in Q3. We also expect to record charges in Q4, totaling approximately 20 to 30 basis points related to unplanned store closures and recovery costs associated with the recent hurricane near Acapulco, Mexico.”

Management is raising its full-year earnings-per-share guidance range to $6.40 to $6.48.