• by Sarah Mahoney  @mahoney_sarah, Yesterday

Walmart’s first-quarter sales rose 2.5%, beating Wall Street forecasts and suggesting U.S. shoppers are still spending. But the company also became the largest retailer yet to confirm tariff-related price hikes, warning it will soon pass increased import costs on to consumers.

In a rare show of corporate candor, CEO Doug McMillon acknowledged inflationary pressures during prepared remarks: “I want to thank President Trump and Secretary Bessent for the progress made recently,” he said. “We're hopeful that it leads to a longer-term agreement between the U.S. and China that would result in even lower tariffs. We will do our best to keep our prices as low as possible. But given the magnitude of the tariffs—even at the reduced levels announced this week—we aren't able to absorb all the pressure given the reality of narrow retail margins.”

Walmart’s stance stands out at a time when many large companies remain cautious in how they discuss tariffs, wary of drawing political attention. Still, with tariffs now a reality rather than a threat, Walmart appears to be setting expectations for higher shelf prices.

And if the trade war is already rattling boardrooms, it may be reshaping households even faster. New Gartner research finds that 42% of Americans have delayed a major purchase due to economic uncertainty, up from 28% a year ago. That number is expected to rise to 60% by year-end.

“Economic uncertainty is already reshaping consumer behavior in profound ways,” said Kate Muhl, vice president and analyst in Gartner’s marketing practice. “There is a clear shift toward more recession-like spending behaviors, including budget-conscious shopping strategies, paying down debt, and hunkering down,” she tells Marketing Daily. “People are prioritizing financial stability over immediate gratification.”

That’s likely to benefit Walmart. The retailer’s massive footprint, price-driven reputation, and growing digital and ad businesses position it well to attract increasingly cautious consumers.

Revenue climbed 2.5% to $165.6 billion. Global advertising sales—including Vizio—jumped 50%, with ad sales at Walmart Connect, the U.S. retail media network, up 31%. Operating income rose 4.3% to $300 million.

Ecommerce sales grew 22%, and the division turned a profit for the first time in Walmart’s history, a long-awaited milestone that reflects operational improvements and scaled advertising support.

Analysts remain bullish on Walmart’s prospects. “We expect the retailer’s scale and attractive pricing position to resonate with cautious consumers and yield continued market share gains in coming quarters,” wrote Noah Rohr, a Morningstar analyst. “We are optimistic that Walmart can take market share during tumultuous economic times and enjoy margin expansion as lucrative revenue streams, such as advertising, come into play.”

Deutsche Bank analyst Krisztina Katai also pointed to Walmart’s operational strengths. “Inventory is well managed, markdowns are lower, shrink is improving, advertising is accelerating, membership is growing at a healthy clip and, most importantly, ecommerce inflected to profitability for the first time in the business's history,” she wrote.

Still, some observers warn that Walmart’s pricing transparency could backfire if competitors manage to hold the line. Katai doubts that will happen:  “Thirty percent tariffs still pose a meaningful hit to already low retail margins.”

Walmart’s gamble appears to be that customers will stay loyal—even with modest price increases—so long as its value proposition stays clear.