Walmart CFO warns the affordability crisis is getting worse as it widens its lead over Target-awdailynews

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2025-11-21

Walmart CFO warns the affordability crisis is getting worse as it widens its lead over Target

The gap between those who can and those who cannot afford everyday essentials is widening, per Walmart (WMT).

”The disparity between the low income cohort and the upper income cohort has grown a little bit in recent months,” Walmart CFO John David Rainey told Yahoo Finance’s Market Catalysts.

“If you look at October wage growth… [the difference] was as large as it’s been in almost a decade,” he said.

Shares of Walmart jumped over 6% in Thursday trading after the company posted better-than-expected third quarter earnings and raised its guidance. The reaction underscores how closely investors are tracking the health of the consumer — especially lower-income shoppers who drive Walmart’s core business.

Rainey painted a clear picture of the affordability challenge facing millions of Americans. Food prices is a big reason why. Prices are still roughly 25% higher than during the pre-COVID period, Rainey said. While inflation inside Walmart’s own basket has cooled to about 1%, the “baseline” remains far elevated for families already stretched thin.

That leaves a growing subset of shoppers trading down, stretching out purchases, and becoming more value-seeking, Rainey explained.

His comments come as Walmart reported a strong quarter. Same-store sales in the US rose 4.5%, lifted by grocery, health, and general merchandise categories. Transactions rose 1.8% and average basket size climbed 2.7%.

In Q3, revenue reached of $179.5 billion, up 5.8% from a year earlier and ahead of the $177.6 billion expected, according to Bloomberg data. Adjusted earnings per share came in at $0.62, slightly beating estimates of $0.60.

Walmart also revised its full-year forecast. The company expects net sales to grow 4.8% to 5.1%, up from the previous 3.75% to 4.75% estimate. Adjusted earnings expectations were raised to $2.58 to $2.63, from the prior $2.52 to $2.62.

The performance, however, hides some key caveats. Tariff-related costs remain elevated and Walmart is quietly absorbing more of them than it would like.

Rainey said the company is working to “minimize the overall price impact on customers,” especially for heavily imported items like bananas and avocados. He acknowledged Walmart had to be “very selective” about where it passes higher costs along.

He admitted that being “wired for everyday low prices” has its limits. The retailer is walking a fine line between shielding consumers and protecting margins at a time when tariff costs, supply-chain shifts, and higher labor expenses all pressure businesses.