Walmart warns fuel costs will strain shoppers and may trigger price hikes

Walmart reported first‑quarter revenue of $177.8 billion, up 7.3% year‑over‑year, with net income of $5.33 billion and adjusted earnings of $0.66 per share. The retailer’s operating income rose 5%, but a $175 million hit from higher‑than‑planned fuel expenses was highlighted by CFO John David Rainey.

Rainey said rising gasoline prices – driven by the war with Iran and the closure risk of the Strait of Hormuz – are pressuring U.S. household budgets. Average U.S. pump prices have reached about $4.56 per gallon, and the average gallons purchased at Walmart stations fell below 10 for the first time since 2022, which the company views as a sign of consumer stress.

Because of the fuel shock, Walmart warned that sales growth for May‑July would slow to 4‑5% versus the 7%+ seen previously, and the company expects “somewhat higher retail price inflation” in the second quarter and the latter half of the year. It reaffirmed its full‑year EPS outlook of $2.75‑$2.85, below analyst expectations, and its shares fell about 7% after the earnings call.

The retailer also noted strong performance in its e‑commerce (up 26%) and advertising (up 37%) businesses, as well as a 17% rise in membership fees, which help offset macro pressures. Nonetheless, the company signaled that continuing elevated fuel costs could lead to higher shelf prices for consumers.