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Walmart (WMT) posted a solid first quarter Thursday — with a big “in this economy” caveat — as digital sales, membership fees, and ad revenue all delivered double-digit growth. But after weeks of tariff anxiety, CFO John David Rainey is making headlines with a clear warning: Higher prices are coming if new duties on Chinese goods take effect.

“We would expect price increases if those tariffs are enacted,” Rainey told CNBC Thursday, sharp words for the world’s largest retailer by revenue and (arguably) the world’s largest deflationary anchor in consumer pricing. Consumers are “going to start seeing higher prices,” he said.

The warning landed just weeks after Walmart pulled its Q1 guidance on April 9, seven days after President Donald Trump’s “Liberation Day” tariff rollout that upended global trade. Now Walmart is reiterating full-year projections, including 3-4% net sales growth, but withholding near-term profit guidance, citing that old saw: a “dynamic” macro environment.

Walmart stock was off slightly in premarket trading Thursday morning.

Wealthy households trade down

For the quarter, Walmart’s revenue rose 2.5% to $165.6 billion (up 4% in constant currency), with U.S. same-store sales climbing 4.5%, driven largely by groceries and health products.

Contributing to the gain? Wealthy shoppers trading down, possibly for those same “dynamic” macro reasons. Grocery market share growth was “led by upper-income households,” according to the earnings presentation.

But even as Walmart broadens its grip on American wallets, margins remain tight. Net income fell 12%, and adjusted EPS edged up just 1.7%. Executives blamed higher depreciation and wage investments, other costs that may get steeper if and when tariffs bite.

For now, Walmart’s size, scale, and value positioning remain competitive advantages. But Rainey’s message was clear: Even the stalwart Walmart can’t hold the line forever.

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