The Brief

In a sport known for turf battles, SoCal surfing is facing perhaps its most epic turf challenge yet — all the way from the ski slopes of Utah. U.S. Ski and Snowboard, the Olympic organization for those sports, is making a bid to add surfing to its roster.

“When you look at the heart of what we do — supporting elite athletes and growing action sports — it makes complete sense,” Sophie Goldschmidt, the head of U.S. Ski and Snowboard, told LAist in an email. “Surfing is a natural extension of our mission.” (Goldschmidt also headed the World Surf League, a pro circuit, before taking the top job at U.S. Ski and Snowboard.)

Many surfers disagree. Ian Cairns, a former champion surfer and coach who helped develop the sport competitively, said the snow group is “ trying to ski-jack the crown jewels of surfing away from the surfing world.”

“ Effectively what they're doing is they’re skimming the cream off the top,” Cairns said of U.S. Ski and Snowboard’s bid to become what’s known as the National Governing Body for the U.S. Olympic surfing team. “They're going to take the commercial rights and they're going to put those dollars into their infrastructure.”

The backers of USA Surfing say they have proof that their rival U.S. Ski and Snowboard doesn't know anything about the sport of surfing: In a presentation to the Olympic committee, they used a surfing icon that appears to show a surfer facing backward on a board. The surfing organization has made it the centerpiece of their P.R. campaign against the group.

San Clemente native Sawyer Lindblad surfs in the 2024 Rip Curl Pro Bells Beach on March 27, 2024 in Winkipop, Australia. Lindblad is backing USA Surfing in its bid to manage the U.S. Olympic surfing team.

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Cairns and a number of other pro surfers are throwing their weight behind USA Surfing, the comparatively scrappy organization that trains and develops young surfers with Olympic dreams. The San Clemente-based nonprofit — which helped make surfing an Olympic sport to begin with — is not giving up its chance to represent Olympic athletes without a fight.

They recently launched a public relations blitz in an effort to win over Olympic leaders, who will soon decide which organization will represent the U.S. Olympic surf team at the 2028 Games in L.A. At stake is whether that team will have its home base, and the accompanying money and prestige, on the shores of San Clemente or the slopes of Park City.

The backstory: A brief history of USA Surfing’s troubles

Why is an organization focused on snow sports even in the running to take over Olympic surfing? Because USA Surfing has had a tough run of late.

Back in 2017, USA Surfing became the national governing body for the sport of surfing, charged with training young surfers, developing the sport, and nominating athletes to compete on the Olympic stage. But they lost that status shortly after the sport made its Olympic debut, in the 2021 Tokyo summer games.

That’s because in 2019, the U.S. Olympic and Paralympic Committee audited USA Surfing and found numerous problems, including failing to disclose conflicts of interest. The audit also found minimal documentation and oversight of how the organization’s leaders were spending its money. As a result, USA Surfing voluntarily agreed to relinquish its control over the U.S. Olympic surf team until after the 2024 Paris games.

Despite the turmoil, the U.S. surfing team won gold medals at both games — Carissa Moore in Tokyo and Caroline Marks in Paris (in case you missed it, the actual surfing took place in Tahiti).

During all that time, and to date, USA Surfing has been training Olympic hopefuls and holding competitions at Lower Trestles in San Clemente — the same place surfers will compete in the LA28 games.

And USA Surfing now has entirely new management. CEO Becky Fleischauer told LAist the organization has done all the things the Olympic committee said it needed to in order to regain its role as the National Governing Body, including adopting financial best practices, improving transparency, and showing financial stability.

Fleischauer called the surfing competition at the 2028 games a “legacy building opportunity.” “We want the Olympics to provide the lift to the surfers, the community, the businesses, and our program,” she said.

Despite the high stakes, Fleischauer declined to diss on U.S. Ski and Snowboard and their bid to intrude on the local surf turf.

“ We never really wanted to be in an antagonistic position with another sport that athletes work really hard to do,” she said.

Ian Cairns, a former surfing champion and coach, is among those campaigning for USA Surfing to oversee the entire pipeline of U.S. competitive surfing, including the U.S. Olympic surfing team. (And yes, that neck brace is the result of a surfing accident.)

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What’s this really all about?

For most of the public, the Olympics are a national ego-boosting spectacle and a chance to watch athletes and sports that usually don’t get much play in the mainstream media. But the Olympics are also big business.

For one thing, there are sponsorships from companies that want their name associated with popular sports and winning athletes. For another, national governing bodies for Olympic sports get money directly from the Olympic committee. Both US Ski and Snowboard and USA Surfing acknowledge that money is part of their motivation.

For the winter sports group, adding surfing would free them from their seasonal confines. “From a commercial perspective adding a summer sport to our winter sport portfolio gives us year-round assets and programming to sell,” US Ski and Snowboarding wrote in its official bid to absorb Olympic surfing. (Goldschmidt told LAist that U.S. Ski and Snowboard also is interested in assuming control over Olympic skateboarding.)

If that happens, USA Surfing would essentially continue to do most of the work to develop and support the nation’s top surfers without reaping the benefits of representing them at the world’s most venerated competition.

“ It would siphon money and opportunity,” Fleischauer, from USA Surfing, said of the possibility of permanently losing control over Olympic surfing.

On the flip side, she said, “We've talked to sponsors who would support us at another level if we were the national governing body.”

Of course, there are those who wish surfing had remained the weird, counter-culture activity it once was, out of the limelight, anti-commercial. But that ship sailed long ago.

Today, surfing is a $9 billion industry, according to an article published earlier this year in the Orange County Business Journal. And many of the top brands have their roots in Orange County. They also stand to benefit if USA Surfing wins its Olympic bid, said Vipe Desai, executive director of the Surf Industry Members Association, a trade group.

“This is about local jobs, the local economy, local businesses,” Desai said. “If this money gets transferred out of state to another region, it's not going to support the business and the culture.”

Big snow, big money

Financially, U.S. Ski and Snowboard is a goliath compared to USA Surfing. The snow group took in over $38 million in revenue in 2024 compared to less than $900,000 for USA Surfing, according to tax statements. But that’s at least in part because U.S. Ski and Snowboard has 10 Olympic sports in its current portfolio with dozens of athletes.

Goldschmidt, the head of U.S. Ski and Snowboard, said the group’s robust infrastructure, including high-tech training facilities and “commercial support” for athletes (read: sponsorships) would benefit elite surfers.

“I respect the passion and pride that people have within the surf community," Goldschmidt wrote in an email to LAist. “This isn’t about taking anything away — it’s about adding to what’s already been built.”

Growing support for USA Surfing

As the date nears for a decision from the U.S. Olympic and Paralympic Committee, USA Surfing has garnered some key support for its bid. In June, they announced a multi-million dollar investment from San Clemente-based businessman Kipling Sheppard, intended to kickstart an endowment for the organization.

“Our motivation is simple,” Sheppard said. “It's to keep surfing with the surf community and those that are involved in it day-to-day and make sure that the Olympic ‘lift’ that will occur here in San Clemente benefits the people and the community of San Clemente.”

The International Surfing Association, which is recognized by the International Olympic Committee as the authority on competitive surfing, is also backing USA Surfing. That’s key because surfers have to surf in ISA competitions to qualify for the Olympics. Perhaps an even bigger snub: The World Surf League, Goldschmidt’s former organization, is also backing USA Surfing.

USA Surfing has also clinched a bunch of letters of support from local leaders, including a group of U.S. Congress members, O.C. Supervisor Katrina Foley, and the San Clemente City Council. And they have support from some of the nation’s top surfers. Sawyer Lindblad was among a group of pro surfers who showed up at a San Clemente City Council meeting in August to ask for support for USA Surfing. Lindblad, a San Clemente native, was fresh off her first place win, two days earlier, at the 2025 US Open of Surfing in Huntington Beach.

“ I don't think I would be as successful as I am without them,” Lindblad said of USA Surfing. “ It truly shaped me into the surfer I am today.”

 Kirra Pinkerton, another San Clemente native and the 2022 International Surfing Association World Champion, is also throwing her support behind USA Surfing.  “Obviously all of our goals eventually is to qualify for the Olympics,” she said. “I believe the best way to do that is to stick to what our roots are.”

Asked whether fellow athletes might appreciate the bigger platform and deeper coffers offered by U.S. Ski and Snowboard, Pinkerton said she doubted the snow sports group would find much support in the water.

“ Surfers will back surfers forever,” she said.

The ultimate decision about which of the two groups will represent surfers on the world stage is up to the U.S. Olympic and Paralympic Committee. They’re expected to hold their second and final public hearing on the issue later this month, although the exact date hasn’t been set.

CORRECTION: An earlier version of this story incorrectly stated that USA Surfing had lost its status as the national governing body for Olympic surfing prior to the 2021 Tokyo games.

California’s Board of Equalization is a coveted spot once again for state lawmakers looking for a new gig almost a decade after then-Gov. Jerry Brown signed a law gutting the organization of any serious governing responsibility.

This year, three current state lawmakers are competing for seats on the nation’s only elected tax board. They’re among some two dozen candidates on the ballot for its four elected positions, which are divided by geographic districts.

The board has long been a launching pad to higher offices in California politics — Fiona Ma served on it before becoming state treasurer, as did Betty Yee and Malia Cohen before each being elected state controller.

The agency itself is a throwback to the 19th Century. It’s rooted in an 1879 constitutional amendment that created it and charged it with “equalizing” county property tax assessments statewide.

From that narrow mandate, it swelled to become a juggernaut that collected a third of the state’s tax revenue and provided a venue for people and businesses to contest their tax bills in front of the elected board. It survived numerous efforts by governors to kill it outright, including attempts by Pete Wilson and Arnold Schwarzenegger.

That is until 2017, when a cascade of allegations about board members misusing the office to promote themselves led to an authoritative state audit that lawmakers could not ignore.

Brown signed a law stripping the agency of any powers beyond what voters gave it in 1879 and created two new departments that report to the governor instead of the elected board: one to collect sales and use taxes and another to hear taxpayer appeals.

After that, Board of Equalization elections tended to be lower profile contests. Ted Gaines, a former Republican state lawmaker from the Sacramento area, won a seat. Former Democratic Assemblymember Sally Lieber is up for reelection on the board this year. The other members had experience in local politics instead of inside the Capitol.

“We’re lean but we’re not mean,” said Lieber, the incumbent for District 2, which includes 19 counties centered on the Bay Area. “I think the Board of Equalization is the right size in the system right now…I do really believe that the board has a role to play in being a forum for taxpayers to come forward to.”

This year voters will see more contentious elections for the tax board:

• In District 1 representing inland California, Republican state Sen. Shannon Grove of Bakersfield has more than $900,000 in a campaign account and name recognition from her representing the San Joaquin Valley in the Legislature since 2010. Democrats are putting up a fight for the district. Fresno City Councilmember Nelson Esparza is running with the party’s support.
• In District 2 representing coastal California north of Los Angeles, incumbent Lieber faces San Mateo Community College District Trustee John Pimentel. Lieber has the Democratic Party’s endorsement, but a number of Bay Area Democratic leaders are backing Pimentel, including state Treasurer Ma and San Jose Mayor Matt Mahan.
• In District 3 representing the Los Angeles area, former Monterey Park City Councilmember Yvonne Yiu put up $760,000 of her own money and has about $1 million on hand. The race has another heavyweight in Assemblymember Mike Gipson, a Democrat from Gardena who has served in the Legislature since 2014. 
• District 4 representing the San Diego area has an especially crowded race with Democratic state Sen. Tom Umberg of Santa Ana, San Ysidro school board member Martín Arias, San Diego Unified School District board member Cody Peterson, and Denis Bilodeau, a Republican supported by San Diego Assemblymember Carl DeMaio’s Reform California organization.

A forum for California taxpayers

The board was always popular among taxpayer advocacy groups, who liked that it provided a forum to focus on tax issues in a capital where debates often center on labor and business.

“It’s a very useful elected body that answers to the voters,” said Susan Shelley, vice president of communications for the Howard Jarvis Taxpayers Association.

Some of this year’s candidates are thinking of ways to make the most of the agency.

Arias believes the board could do more to assist homeowners and potential homeowners. As a taxpayer advocate in the San Diego County Assessor’s Office, he says he works with the Board of Equalization every day and has a front seat to how the system works.

“I think there’s a bigger opportunity here to make the Board of Equalization the constitutional office that it is — that it should be,” he said. “There’s a clear opportunity here for us to start advocating at the state level for all of our taxpayers, including those that don’t speak English.”

Umberg said he’d like the board to have more investigative power and resources. Citing instances in which San Bernardino and Los Angeles assessors have been arrested on felony charges, he said he’s most interested in the board’s oversight of property tax assessors.

“Although it’s not a high-profile job, it’s a critically important job, especially when we’ve got so many revenue challenges in California,” Umberg said in an interview with CalMatters.

Questioning BOE’s relevance

Advocating for the board’s expansion has drawn criticism from former board members and employees. Yee, a board member from 2004 to 2014, has been vocal about abolishing the board entirely because she believes that its limited responsibilities could be easily transferred to another department or agency.

“I just really do question how this board continues to have relevance,” she told CalMatters. “I sometimes feel like the board is really doing a lot of work in search of finding problems to solve. …I know with each of the board members, they feel very strongly about being a taxpayer advocate. But frankly, every public official should be a taxpayer advocate. ”

Democrats stopped short of killing the agency entirely because they would have had to put that question to voters.

“They should have just chopped the head of the snake off and done away with the Board of Equalization altogether,” said Mark DeSio, a former communications director for the board. “They didn’t do that. They left enough of the cancer to grow back.”

He cooperated with the audit that revealed misspending at the agency that appeared intended to promote its elected members as well as another that showed widespread nepotism in its hiring practices. He then lost his job in the reorganization and filed a whistleblower retaliation lawsuit against the state.

DeSio believes lawmakers want seats on the Board of Equalization because it allows them to maintain a high profile until they can run for office again.

“That was the recipe for disaster a few years back,” he said. “Somebody better watch these guys. They’re not there for the policy. It’s for the exposure.”

Cayla Mihalovich is a California Local News fellow.

This article was originally published on CalMatters and was republished under the Creative Commons Attribution-NonCommercial-NoDerivatives license.

Even as gas prices continued to rise across the United States, sales of electric vehicles fell in April. That is in contrast to strong growth elsewhere in the world, such as Europe. But American drivers are gravitating toward at least one more efficient powertrain: hybrids.

Sales of new EVs fell roughly 18 percent from March to April, according to the latest data from Edmunds, an auto research firm. Another company, Cox Automotive, pegged the drop at closer to 6 percent. Either way, experts said it’s clear that high gas prices aren’t leading to a significant shift toward EVs.

“There was a lot of window shopping,” said Ivan Drury, director of insights at Edmunds, noting that searches for electrified vehicles on the company’s site were strong. “It did not translate to tire-kicking and purchases.”

Price remains the steepest barrier for most people, said Drury. While electric vehicles can be less expensive to operate over the long-term — especially when gas prices are high — the upfront costs remain significant. The average transaction price for an EV in April was $6,214 higher than for vehicles with internal combustion engines, Cox reported.

“It’s still a cost hurdle,” said Stephanie Brinley, a principal automotive analyst at S&P Global Mobility. “You don’t know how long it’s going to take to get that back.”

At Thursday’s average gas price of $4.56 per gallon, an EV buyer would have to drive more than 40,000 miles to make up the difference with a car that gets 30 mpg. Savings on maintenance, like oil changes, could accelerate that timeline, but factors such as higher insurance prices and having to install a home charger could make the payback period even longer. If fuel prices fall, the advantage of an EV also shrinks.

“It’s very difficult for people to wrap their head around, ‘Hey, if I spend this $55,000, I might over time save’,” said Drury. “It requires a bit more math than most people want to go through.”

The calculus is much simpler for hybrid vehicles, which utilize batteries that can improve fuel economy by 25 to 45 percent without needing to plug in. A Honda CR-V, for example, gets around 29 mpg while the hybrid version gets 37. More and more popular models are only available as hybrids, a strategy that Toyota has perhaps embraced most notably. Last year, it ditched the gas-only version of the Camry sedan. The 2026 RAV4 followed suit.

Overall, Edmunds data shows that sales of hybrids are up 20 percent year-over-year and nearly 50 percent since February, when the U.S.-Iran conflict began. Sales of gas-powered gas are up about 11 percent over those same two months.

“I think this is going to be a hybrid moment,” said Stephanie Valdez Streaty, director of industry insights at Cox Automotive. “There are a lot of options.”

Used EVs provided another somewhat bright spot, she said. The segment saw a 3 percent increase in sales from March to April and a price premium of only $1,096 over used internal combustion vehicles. Used EVs also sold faster than their used gas-powered counterparts. “They’re really selling efficiently,” said Valdez Streaty, who added that there should be a glut of EVs available throughout the year as leases end. “I don’t think the inventory will be an issue.”

With Iran maintaining its hold over the Strait of Hormuz and summer travel season looming, gas prices appear set to keep climbing — which would only make an EV more appealing. Other parts of the world have seen significant jumps in sales since the conflict began, with Europe experiencing a surge and China setting an export record in April, according to BloombergNEF.

In the United States, though, it seems that only people already in the market for EVs are making the leap. “Edge-case people,” as Brinley called them. Dramatic pump readings “might nudge them because they were already in that direction,” she said. “But what we’re unlikely to see is a shift in current [internal combustion car] owners just fundamentally making that change simply because of gas prices.”

This article originally appeared in Grist at https://grist.org/solutions/why-hybrids-not-evs-are-winning-over-u-s-consumers/.

Grist is a nonprofit, independent media organization dedicated to telling stories of climate solutions and a just future. Learn more at Grist.org

James L. Jones Jr., 69, a self-described “community pastor” and a tireless advocate for Black communities in Los Angeles, was an enthusiastic supporter of Karen Bass’ mayoral bid in 2022, when she made history as the first woman, and first Black woman, to be elected L.A. mayor.

As Bass seeks reelection, Jones is supporting her again. Despite the political turmoil and criticism she has faced during her first term, Jones, known as Reverend JJ, believes she has a plan for Black progress that may not be evident, but is long range and strategic.

“I believe that in my heart of hearts, Karen’s not one of those people who follows polls,” said Jones. “In the end she’ll do what’s right for the people.”

When Angelenos elected Bass four years ago, she seemed like the right person to bridge the ideals of the post-George Floyd era and whatever moment was coming next. She was a seasoned politician — a former state legislator, congresswoman and native Angeleno with a history of grassroots organizing and coalition building in a city that was leaning more progressive.

But in 2022, there was trouble on the horizon. The nation’s Floyd-inspired reexamination of racial equity was losing ground to a growing MAGA backlash that had helped kill a major federal bill to reform policing, among other initiatives. Big blue cities like Los Angeles that had seen big protests for racial justice were being cast as chaotic and ungovernable.

Four years later, the ideals that propelled Bass’ election have taken a beating. Trump’s return to the White House has elevated long-simmering anti-“wokeness” and white resentment into federal policy. And the administration has focused special ire on California and Los Angeles, where Bass is in charge of the nation’s largest city currently led by a Black mayor.

Bass is taking a beating too. As she seeks reelection in the June 2 primary, the mayor is weathering criticism from many sides that she’s done too little about everything, from the homelessness and housing crisis that she made a signature issue to her response to the epic January 2025 wildfire that destroyed thousands of homes in Pacific Palisades, one of the city’s wealthiest neighborhoods.

Despite facing more voter uncertainty this time around, Bass is leading in the polls, with 30% support among likely voters, according to the latest survey by Emerson College Polling/Inside California Politics. While Bass’ support has jumped 10 points since March, she would have to get more than 50% of the vote to avoid a runoff with the other top vote-getter in November.

Her most formidable challengers in the crowded primary are Councilwoman Nithya Raman, a Democratic socialist to Bass’ left who is campaigning on housing affordability and a host of other progressive causes, and Spencer Pratt, a former reality show star with no political experience who skews conservative and touts cleaning up crime and homelessness. A former Bass ally, Raman pledges to do better than the mayor on reducing homelessness and increasing new housing production; Pratt decries corrupt leadership and talks chiefly about making L.A. great again, a la MAGA. Pratt and Raman are polling at 22% and 19%, respectively.

Missing from all the criticism of how Bass has fallen short is how or whether her election has benefited L.A.’s Black community. It’s a population that is rapidly continuing to dwindle — to roughly 8% today from a peak of 18% in 1970 — besieged by gentrification, stratospheric housing costs, underemployment and shrinking political representation, all of it aggravated by the racial hostility emanating from Washington. That norm-shattering phenomenon has tended to eclipse discussion of racial crises happening locally, with good reason. But politics are still local, and many Angelenos who supported Bass in 2022 hoped that electing the second Black mayor in the city’s history would help move the needle on longstanding Black problems dating back to 1992 that have reached yet another inflection point.

But public assessments of Bass by Black leaders the last four years, including this election cycle, have been muted to nonexistent. The exception is Black Lives Matter Grassroots L.A., which has routinely taken her to task for increasing police funding instead of allocating more resources to social and other services — a core part of the post-George Floyd reforms. Observers say the reticence among Black leaders is partly due to the fact that Bass has been so inundated with crises, some not of her making — especially the Palisades fire. The view that Bass committed a fatal mistake by being on a diplomatic trip to Ghana when the fires broke out has more or less defined her politically since.

That’s unfair, said Michael Guynn, a veteran social worker and community activist who lives near Florence and Normandie avenues, a famous site of the 1992 racial unrest.

“I don’t give a damn if she was out of the country — she got back when she could,” Guynn said. “They blamed her for what the fire department was responsible for.”

Then there’s the racism that dogs Black elected officials, women in particular. Pratt, who lost his home in the Palisades fire last year, has invoked Donald Trump-like rhetoric to belittle L.A.’s first Black woman mayor. That includes an official campaign poster that depicts Bass stuffed in a trash can and says “throw out Karen Basura,” the Spanish word for trash, echoing Trump’s disparaging of Somali immigrants — a demographic that includes Minnesota Congresswoman Ilhan Omar — as “garbage.”

But the takedown isn’t only coming from the MAGA right, said Genethia Hudley-Hayes, former president of L.A.’s civilian Fire Commission and a Bass appointee who stepped down in March.

“There’s always the bigotry of, ‘We rallied around this Black woman and she hasn’t performed,’” said Hudley-Hayes. “She’s not a superwoman. That’s part of the ‘I’m mad’ vote in L.A.”

Another hurdle for Bass, Guynn said, is the unrealistic expectation that she would dramatically reduce or even eliminate homelessness.

“She couldn’t get a fair break because of that,” he said, adding that “everybody hates homelessness and wants it to go away, but nobody wants to do the work.”

Homelessness certainly qualifies as a Black concern: 32% of unhoused people in the city are African American, according to the city’s latest count. Bass’ signature program Inside Safe, which seeks to get people off the street and into temporary housing, has made inroads. But the mayor’s efforts have been hampered by what City Hall observers say is a larger problem of messaging, management and oversight. The scandal involving a subcontractor accused of defrauding the city’s homeless services authority of $23 million is a painful reminder of that.

Hudley-Hayes says that it points to the need for the mayor of L.A. to be a skilled executive, a skill that Bass doesn’t have, at least not yet.

“You need collaboration, which is different from coalition building, different from the activism of Community Coalition,” she said, referring to the grassroots South L.A. organization co-founded by Bass.

Deep understanding of the roles of not just the 41 city departments but of bigger entities like the county is essential not just for running the city but for effecting racial justice as well.

“Homelessness is important, but you have to ask, what are the structures that create homelessness? It’s not just a city problem but a regional problem,” said Hudley-Hayes. “Inside Safe is a program, not a strategy.”

But being a better executive wouldn’t automatically guarantee improvements for Black people. Tom Bradley, who was mayor from 1973 to 1993, is venerated both as a coalition builder and astute manager who improved many parts of the city. But he didn’t do enough for L.A.’s Black populace. While the Black middle class flourished during the Bradley years, in part because Black municipal employment flourished, the larger working class and poor in South L.A. did not.

Hudley-Hayes argues the mayor’s lack of accountability to L.A.’s Black population as a whole is longstanding, and not unique to elected officials like Bradley or Bass. Local branches of civil rights groups like the NAACP and the Southern Christian Leadership Conference — which Hudley-Hayes once led — also play a part in accountability, though they have declined notably over the years. But Hudley-Hayes notes that accountability works two ways.

“Black people have individual agency, but we have to exercise it together,” she said. “We have to pool our experience. It means nothing if we don’t demand what we want.”

Even — especially — in these trying times, and in a city with as much possibility as L.A., problems notwithstanding — those demands should still matter.

Copyright Capital & Main 2026

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Walmart will likely put its tariff refunds toward lowering store prices, executives said on Thursday, as they described shoppers who are increasingly anxious about the rising cost of fuel.

In recent weeks, visitors to Walmart's gas stations have begun to fill up with fewer than ten gallons for the first time since 2022, Chief Financial Officer John David Rainey told investors on an earnings call.

"That's an indication of stress," he said.

"We see with our customers that the high-income customer is spending with confidence," Rainey added later, "while the lower-income consumer is more budget-conscious and perhaps navigating financial distress."

The U.S. government last week began refunding tariffs payments to importers that paid higher customs fees imposed by President Trump last year before the Supreme Court struck down most of them. Walmart is now the largest retailer to suggest that it will put those refunds toward potential price cuts.

"We think that the single best return that we can have on a dollar of capital right now is to investment in the customer, invest in price," Rainey said, noting that Walmart's stores and gas stations have been drawing more shoppers looking for deals. U.S. sales grew 4.1% from February through April.

Shoppers' slightly bigger tax refunds this year seem to be offsetting some of the budget pain so far. That's according to rival retailers Home Depot, Target and Lowe's, which also held earnings calls this week. Sales at all three companies grew in the latest quarter.

The latest federal data shows spending at retail stores and online grew 5.2% in April compared to a year earlier, surpassing inflation. That means people may have spent more because of higher prices, but also because they bought more things. At gas stations, spending surged a whopping 21%, driven by higher gas prices.

Walmart executives warned that persistently high gas costs would eventually drive up the prices shoppers see at stores.

The U.S. war with Iran has snarled tanker passage through the Strait of Hormuz, a vital corridor for shipments of both fuel and fertilizer needed to grow food. U.S. inflation already jumped to its highest level in three years in April, with energy prices being a big driver. The average U.S. price of regular gas on Thursday was $4.56 per gallon, according to AAA. That's up $1.38 from a year ago.

So far, major retailers have been absorbing their growing transportation and shipping costs. Walmart on Thursday reported a notable hit to its income from higher fuel expenses. Home Depot executives told investors on Tuesday that the company might use its own tariff refunds to offset its mounting fuel costs.
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