Walmart reported strong first-quarter results for fiscal 2027, but reiterated a cautious outlook due to soaring gas prices. Gas prices rose amid the U.S. war with Iran and bottlenecks at the Strait of Hormuz. Walmart’s CFO said consumer spending held up during the quarter, possibly supported by tax refunds, but low-income customers are hardest hit and spending is declining. He said tax refunds are largely not coming in, so higher fuel prices will create more pressure going forward into the second quarter. Walmart’s shares fell sharply despite revenue and earnings per share beating expectations. Target, after earlier struggles tied to cost-of-living pressures, tariffs, and consumer boycotts, showed signs of improvement with sales and stock rising.
"Walmart reported strong first-quarter earnings for the 2027 fiscal year, but reiterated its previous, less-than-rosy financial outlook citing high gas prices, which have spiked as a result of the U.S. war with Iran, amid a bottleneck at the Strait of Hormuz."
"Rainey told CNBC that while consumer spending held up this past quarter despite the high price of gas—possibly due to high tax returns—over all, low-income Walmart customers (those most affected by this K-shaped economy) are hardest hit and spending less."
"Rainey said now that "those tax refunds are largely not coming in, I think consumers are going to feel more of that pressure from higher fuel prices" going forward in the second quarter."
"Meanwhile, Target, which was struggling a year ago amid a cost-of-living crisis and rising tariffs, and following consumer boycotts over a DEI rollback, seems to have hit reverse—with sales and stock price in an upswing."
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