Walmart is warning that rising gas prices are forcing American consumers to pull back on spending. The retail giant expects sales growth from May through July to slow significantly from the previous quarter, as the war with Iran continues to squeeze household budgets.
Data from AAA shows the average price of a gallon of gas has hit $4.56, up from $3 when the conflict began.
Finance chief John David Rainey told CNBC that higher tax returns from President Trump's One Big Beautiful Bill Act had so far offset the rising cost of living. But he cautioned that as those refunds fade, shoppers will feel more pressure from higher fuel prices.
Walmart also warned that if the closure of the Strait of Hormuz continues, it could be forced to hike food prices due to shortages of fertilizer, nitrogen, and phosphates.
The company posted first-quarter profit of $5.3 billion, up nearly 19% year-over-year, with sales rising 7.3% to $177.8 billion. However, it now projects growth of just 4% to 5% for the current quarter.
Shares fell 7% on Thursday in response to the weaker-than-expected outlook.