Walmart on Q2: Low and middle income consumers are pulling back on tariff raised prices

Company Performance - Walmart experienced its worst day since April after missing earnings expectations for the first time in over two years [1] - Despite the earnings miss, the company is raising its sales and earnings forecast [1] Tariff Impact and Mitigation - Walmart has been able to absorb a significant portion of tariff costs, performing better than anticipated in May [2] - The company is aggressively working to keep prices down despite rising tariff costs [3] - Price increases in tariff-impacted areas are causing lower and middle-income consumers to switch categories or reduce unit purchases [3] Consumer Behavior - The consumer is generally resilient and holding up [3] - There are early signs of consumer pullback among lower and middle-income groups due to price increases [3] Future Outlook - The impact of tariffs is being phased in gradually, with potentially more effects visible by early 2026 [5][6] - Much of the inventory affected by tariffs is already in place, including holiday merchandise [5] - The ultimate impact of tariffs depends on ongoing negotiations with China and retailers' diversification efforts [6]