Episode summary
Walmart Flags Higher Fuel Costs Eroding Retailer’s Earnings | Bloomberg Intelligence
Bloomberg Intelligence
· · Hosts: Paul Sweeney, Scarlet Fu · Guests: Jennifer Bartashus, Angelo Zino, Christopher Ciolino, Anthony Hughes
Summary
Walmart’s quarter centered on the squeeze from fuel costs and the company’s ability to offset it through a stronger mix, especially e-commerce and membership revenue. The analyst said higher gas prices pressure lower-income shoppers, but they also reinforce Walmart’s value proposition and even lift some fuel-related sales. She also said Walmart has managed to absorb almost all of the fuel increase while keeping the business flexible enough to handle unexpected costs.
The discussion then turned to Walmart’s digital engine, which was described as growing at a sustained high-20% pace as the marketplace expands. More sellers, more shoppers, and more advertising are feeding a virtuous cycle, while Walmart Plus is adding sticky households and changing the profit mix. The analyst said the membership product is helping Walmart keep higher-income customers in its ecosystem and narrowing the gap with Amazon.
Nvidia and Deere rounded out the earnings review. On Nvidia, the analyst said the quarter was solid but investors are focusing on sustainability, competition, and whether revenue can broaden beyond hyperscalers. On Deere, the analyst said the construction business remained strong, but weak farm fundamentals and higher input costs continue to weigh on the ag side, with 2026 seen as the likely trough.
Key takeaways
- The analyst said Walmart’s fuel exposure is a near-term margin pressure, but higher gas prices also support value shopping and some fuel revenue.
- Walmart’s e-commerce business is now profitable and still growing in the high-20% range, driven by marketplace expansion and ad revenue.
- The analyst said Walmart Plus is becoming a major retention tool, helping pull households away from Amazon and keeping higher-income shoppers sticky.
- On Nvidia, the analyst said the market is questioning the durability of growth even after another solid beat-and-raise quarter.
- On Deere, construction was a bright spot, but the analyst said farm equipment demand remains weak and 2026 still looks like the trough of the cycle.
Notable quotes
“Walmart has really done a good job of shifting their business mix which really gives them a little bit more flexibility”
“it's almost a a a an odd situation where the more stressed the consumer is, the the more likely Walmart is to be able to serve those customers”
“their e-commerce business is really flourishing and to your point Paul, it's been multiple I mean it's just on a string of double digit high 20% mid 20% growth every quarter”
“the answer to is the sustainability of this stuff, right? and Nvidia can be as optimistic as they want looking out through the end of the decade”
“I do think that 2026 will still mark the trough of the cycle”
How the episode opens
Bloomberg Audio Studios, podcasts, radio, news. You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at 10 a.m. Eastern on Apple CarPlay and Android Auto with the Bloomberg Business App. — Listen on demand wherever you get your podcasts or watch us live on YouTube. Walmart coming out with its latest earnings report. Jen Bartashis is our senior analyst who covers retail staples and packaged food. And Jen, I'm really interested in the interplay between oil prices and Walmart's sales. Um, in particular, we know that fuel costs are definitely squeezing Walmart's consumers. Um, yet Walmart says that it has managed to absorb almost all the fuel increase.
Yeah, it's an interesting dynamic. um when you when you look at it um you know Walmart has really done a good job of shifting their business mix which really gives them a little bit more flexibility in how they can offset unexpected high costs like we're seeing right now with fuel the the consumer for Walmart certainly anybody in the lower end of the consumer spectrum is under some pressure um that does get amplified when gas prices are higher um and so we see that but at the same time what it does is it does reinforce value focused shopping, which is really Walmart's wheelhouse. Um, and so the the it's almost a a a an odd situation where the more stressed the consumer is, the the more likely Walmart is to be able to serve those customers.
Um, not that you want that to be a a never- ending cycle, but but it is something that is that is out there. Um, you know, Walmart is actually they do sell fuel as well. Um, and so, you know, obviously higher fuel prices does feed their top line to a degree, especially for Sam's Club.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- walmart earnings
- fuel costs and retail margins
- ai chip competition
- deere agriculture outlook
- spacex ipo valuation
Companies and tickers mentioned
- WMT
- NVDA
- DE
- Walmart
- Nvidia
- Deere
- SpaceX
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Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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