The news: Walmart boosted its full-year earnings and sales outlook, even as tariffs weigh on its costs.

The numbers:

• Adjusted earnings per share were 68 cents, up 1.5% YoY, but short of the 74 cents analysts expected. That was its first miss in three years, which Walmart attributed to a mix of legal claims and some job cuts.
• Revenues of $177.40 billion, up 4.8% YoY, ahead of the $176.16 billion.
• Walmart US comparable sales, excluding fuel, rose 4.6%, ahead of the 4.05% expected, thanks to strong growth in the grocery and health and wellness categories.
• Sam’s Club comparable sales, excluding fuel, increased 5.9%, ahead of the 5.29% expected.

The company now expects net sales to rise 3.75% to 4.75% for the fiscal year, up from its previous expectations of 3% to 4%. It raised its adjusted earnings per share outlook slightly to $2.52 to $2.62, up from the prior range of $2.50 to $2.60.

The tariff impact: While Walmart said in May that it would need to hike prices on some items in response to tariffs, it has taken a cautious, deliberate approach to such increases with CEO Doug McMillon emphasizing, “We're keeping our prices as low as we can for as long as we can.”

• That means raising prices on only about 10% of its imports while absorbing the rest of the costs, CFO John David Rainey told The Wall Street Journal. Grocery inflation was about 1.5%, and general merchandise was in the low-single digit percentages.
• To soften the blow, Walmart is placing early bets on likely bestsellers and cutting back on big-ticket items more exposed to tariffs and consumer pullback. More price increases are expected, but Rainey said they’ll be handled “item by item, category by category” to minimize shopper impact.
• So far, the consumer response has been muted, though McMillon noted that in discretionary categories where prices have risen, unit volumes have slipped as shoppers trade down within categories—or switch away altogether.