Walmart — the company that basically is the American consumer — just whiffed on earnings for the first time since 2022. Shares fell 4% despite revenue topping $177.4B. People are still shopping, but profits aren’t keeping up with rising costs and tariffs.

Same-store sales in the US grew 4.6%, Sam’s Club nearly 6%, and e-commerce is profitable for the second straight quarter. Translation: consumers aren’t tapped out, but they’re choosy. Groceries and health & wellness are leading the way — because let’s be real, people will always pay for the stuff they need.

Margins are the real story. CEO Doug McMillon says Walmart is keeping prices “as low as possible,” but replenishing inventory at post-tariff costs is like filling a bathtub with the drain open. Eventually, costs catch up with profits — and that’s what investors are noticing.

Takeaway: Retail isn’t dying, it’s evolving. If Walmart — a price-sensitive giant — is feeling the squeeze, smaller retailers with thinner margins will feel it even more. Watch what consumers are buying, where they’re cutting back, and which companies can actually keep margins intact. That’s where opportunity (and risk) lives.