Walmart reported a slowdown in profit growth to 5% ($7.5 billion) in the first quarter, falling short of analyst estimates despite a stronger-than-expected revenue increase of 7.3% to $177.8 billion. The retail giant missed its target of increasing operating profits faster than sales, with fuel costs from the Iran war significantly impacting margins.

The war in Iran pushed diesel prices up nearly 50% and increased petrol costs, which shaved 2.5 percentage points off Walmart's operating profit growth. The Arkansas-based company absorbed these higher fuel costs to maintain low prices for core lower-income customers, who have increasingly flocked to Walmart seeking value.

Walmart offset some pressure through higher-margin businesses like memberships and advertising. Same-store sales rose 4.1% in the US, beating estimates. The company maintained its guidance for net sales to increase 3.5-4.5% this fiscal year and adjusted operating income to grow 6-8%, signaling confidence in its strategy despite geopolitical pressures.