Walmart (NYSE: WMT) reported a solid first quarter but fell more than 7 percent on the day after issuing guidance that fell short of expectations and flagging fuel costs as a growing drag.
Revenue rose 7.3 percent to $177.8 billion, with US same-store sales up 4.1 percent, driven by ecommerce growth and membership fee income.
Higher-income households are driving a disproportionate share of the gains, while lower-income consumers are struggling to keep pace with rising costs across food, fuel, housing, and childcare.
April inflation came in at 3.8 percent, the highest in nearly three years, with the Iran war pushing energy prices sharply higher across the economy.
Regular gasoline averaged $4.56 nationwide on Thursday, compared to $2.98 before the conflict began, and diesel averaged $5.66, up around $2 over the same period.
For the first time since 2003, consumer prices outpaced wage growth in April, a milestone that marks a genuine deterioration in household purchasing power.
Walmart’s chief financial officer John David Rainey warned that the cushion provided by tax refund season is fading and that consumers will feel fuel price pressure more acutely in the months ahead.
The company’s guidance for the current quarter came in below analyst expectations, even after Walmart noted it was not assuming any benefit from potential IEEPA tariff refunds that Citi estimates could total more than $10 billion.
Amazon recently overtook Walmart as the largest global retailer by revenue, adding competitive pressure from above even as economic strain builds from below.
Walmart’s role as the retailer of necessity for cost-conscious Americans keeps it relevant in a downturn, but the forward guidance made clear the operating environment is tougher than the headline revenue number suggests.
