Walmart Inc. (WMT.US) warns of "consumer fault line": increased pressure on low-income customers, deteriorating financial crisis.

Walmart Inc. (WMT.US) stated that the gap between those who can afford essential daily items and those who cannot is widening. Walmart Inc.'s Chief Financial Officer John David Rainey said, "In recent months, the gap between low-income and high-income groups has slightly widened," "If you look at wage growth data for October... this gap has reached the highest level in nearly a decade." On Thursday, Walmart Inc. announced better-than-expected third-quarter earnings and raised its performance guidance, causing its stock to surge over 6%. This market reaction highlights investors' close attention to consumers, especially the financial situation of low-income shoppers who support Walmart Inc.'s core business. Rainey vividly described the affordability challenges faced by millions of Americans, with food prices being one of the main reasons. He pointed out that food prices are currently about 25% higher than before the COVID-19 pandemic. Although the inflation rate for Walmart Inc.'s basket of goods has fallen to about 1%, for families already struggling, this "baseline" remains high. Rainey explained that this has led more and more shoppers to turn to cheaper products, extend their purchasing cycles, and prioritize value for money. As he made these remarks, Walmart Inc. was experiencing a strong quarter: same-store sales in the U.S. increased by 4.5%, driven by food and groceries, health products, and general merchandise categories; transaction count increased by 1.8%, and average basket size expanded by 2.7%. Data showed that Walmart Inc.'s revenue in the third quarter reached $179.5 billion, a 5.8% year-on-year increase, higher than the expected $177.6 billion; adjusted earnings per share were $0.62, slightly higher than the expected $0.60. Walmart Inc. also raised its full-year performance expectations: it expects net sales growth rate to increase from the previous 3.75% to 4.75% to 4.8% to 5.1%; adjusted earnings per share expectations were raised from the previous $2.52 to $2.62 to $2.58 to $2.63. However, behind this performance lies some key concerns: costs related to tariffs remain high, and Walmart Inc. is quietly bearing more of these costs than expected. Rainey said the company is working to "minimize the overall impact of prices on consumers," especially for imported goods such as bananas and avocados. He admitted that when deciding to pass on higher costs to consumers, Walmart Inc. must be "very cautious." He admitted, "The positioning of 'everyday low prices' has its limitations." Against the backdrop of pressures from tariff costs, supply chain shifts, and rising labor costs, this retailer is carefully balancing consumer interests with profit margins. However, pricing strategies for some products remain highly competitive. Rainey used the example of a 50-inch Vizio TV priced at $128, saying that such discounts can attract foot traffic, but the profit logic relies on long-term monetizationthrough the Vizio operating system held by Walmart Inc., the company can earn advertising revenue after the initial sale. This strategy may be one of the reasons Walmart Inc. leads its competitors. When asked why Walmart Inc.'s performance continues to outperform Target Corporation (TGT.US), Rainey did not mention the competitor by name, but emphasized Walmart Inc.'s dual focus on providing value for money and convenience. "In the past, there was a belief that there might be a trade-off between the two," he said, "but at Walmart Inc., this is somewhat of a false premise... We are able to provide both, and we are proving that with our performance."