Walmart Sales Rise as It Navigates Higher Fuel Prices

Walmart said higher fuel prices could bring more shoppers through its doors.

The retailer reported strong sales growth in the most recent quarter and noted that rising fuel prices could draw more cash-strapped low-income shoppers, even as they drag on its own transportation costs and eventually could lead to higher prices on shelves.

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“The headline consumer is reasonably healthy, but when you look underneath, the pressure is uneven,” said Walmart Chief Financial Officer John David Rainey in an interview. “The low-income shopper you can tell is more budget conscious,” as fuel prices rise, he said. Higher tax refunds in the most recent quarter likely muted some of the impact.

At Walmart gas stations, often in store parking lots, shoppers filled their tanks with an average of less than 10 gallons per trip for the first time since 2022. “That’s an indication of stress,” said Rainey. In this environment, Walmart plans to keep prices low to grab share, but could lift prices later if fuel costs stay high, he said.

Meanwhile, higher-income shoppers are gravitating to Walmart’s fast online delivery services and more premium selection in categories such as fashion and beauty, said Rainey.

The dynamics pushed Walmart’s sales higher, with U.S. comparable sales, those from stores and digital channels operating for at least 12 months, up 4.1% in the three months ended May 1 from a year earlier. Sales rose in its major segments and online, the company said.

It is a familiar pattern for Walmart. The retail giant has often benefited amid times of economic trouble as shoppers look for bargains. Consumer sentiment in the U.S. has fallen to record lows in recent months as higher gasoline prices have exacerbated shoppers’ concerns about the economy, but wage and employment figures have held strong. The national average for regular gasoline is now $4.56, according to AAA, a sharp rise from $3.18 a year ago.

Rainey said the company’s full-year sales would now land in the upper end of its earlier expectations of a 3.5% to 4.5% increase. The company said that for the current quarter it expects sales to increase by 4% to 5%. It said earnings per share would be between 72 and 74 cents, slightly below analysts expectations.

Walmart shares fell 7% to $122 Thursday morning. Analysts said some investors see Walmart’s recent success as already reflected in its stock or hoped for higher full year estimates. The stock was up 17% this year through Wednesday.

Walmart’s results add to a string of sales-growth figures from retailers in recent days, while executives say they are watching the macroeconomic environment carefully for changes. On Wednesday, Target reported its first solid quarterly sales lift in years.

Under new Chief Executive John Furner, who took the helm earlier this year, Walmart has continued its push to try to grow faster through some of its newer businesses, such as online delivery and advertising. Earlier this year Walmart lost its crown to Amazon as the country’s largest company by annual revenue. On Thursday Walmart said its e-commerce sales, which include advertising revenue, grew 26% in the most recent quarter, pushed higher by growth of its advertising business and third-party sales online. Globally e-commerce sales now represent nearly a quarter of Walmart’s total sales.

Net revenue rose 7.3% to $177.8 billion in the most recent quarter.

Walmart has filed for a tariff refund, Rainey said, but doesn’t expect a massive windfall from that effort. The company estimates that it paid around $2.4 billion in tariffs that the U.S. Supreme Court deemed illegal, he said, less than 1% of last year’s U.S. sales.

Walmart said higher fuel prices increased the value of its inventory and ate into profits as transportation costs to stock stores and delivery online orders rose. Those costs were offset by higher sales and bigger gains from its nonretail businesses such as advertising, the company said.

Its net income grew nearly 19% to $5.3 billion in the most recent quarter.

The company left its full-year financial estimates unchanged.

Write to Sarah Nassauer at [email protected]

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