Walmart, a bellwether of consumer confidence, saw its revenue increase as the United States began to roll out a new, wide-ranging tariff program. Nevertheless, profit growth was lower than expected.

On Aug. 21, the retail giant based in Bentonville, Arkansas, released its second-quarter earnings report. It indicated that the company’s total revenues increased by about 4.8 percent to $177.4 billion in the three-month period that ended on July 31. Net sales rose by a similar percentage to $120.9 billion.

The performance was disappointing to investors and characterized as a miss. Rather than the expected gross profit margin growth of 24.9 percent, the company reported a quarterly gross profit growth of 24.5 percent.

During a quarterly call with analysts, Walmart CEO Doug McMillon said the company had not yet observed broad-based cutbacks in consumer spending because of tariffs. However, he said prices for consumers will likely trend higher as companies spend less of their own money to mitigate the impact of tariffs. The retailer’s mix of profitable e-commerce operations, high-margin items such as apparel, and advertising revenue has allowed it to absorb some tariff-related cost pressures.

“As we replenish inventory at post-tariff price levels, we’ve continued to see our costs increase each week,” McMillon said

“Overall, consumers are no longer bracing for the worst-case scenario for the economy feared in April when reciprocal tariffs were announced and then paused,” Joanne Hsu, director of the University of Michigan Surveys of Consumers, said in a statement. “However, consumers continue to expect both inflation and unemployment to deteriorate in the future.”

Despite tariff-related headwinds, Walmart raised its fiscal year 2026 guidance, projecting net sales growth of 3.75 percent to 4.75 percent. For the third quarter of fiscal year 2026, the company expects a 3.75 percent to 4.75 percent increase in net sales. It expects operating income to increase by 3 percent, to 6 percent in constant currency.

McMillon said middle- and lower-income households are adjusting by switching to lower-priced items or private-label brands in categories in which prices have risen, while higher-income shoppers continue spending at Walmart.

According to the company’s quarterly financial data, global e-commerce sales jumped by 25 percent, driven by store-fulfilled pickup, delivery, and marketplace operations. Domestic same-store sales rose by 4.6 percent, fueled by strong demand for groceries and health and wellness products.