“Walmart should stop trying to blame tariffs on the reasons for raising prices,” Trump wrote in a post about the Truth Society. “Walmart made billions of dollars last year, far exceeding expectations. It should’ve ‘took’ between Walmart and China without charging any fees to valuable customers. I’ll watch, and your customers will do the same!!!
The president’s rhetoric increased as Walmart prepares to raise prices for certain projects later this month, amid the company’s hikes tariffs arising from Trump’s ongoing trade standoff with China.
Walmart says tariff burden is too heavy to fully absorb
Walmart executives said Thursday that a Reuters report said that even if some reductions were announced this week, retailers will start raising prices to cope with the cost pressure on tariffs. However, Walmart’s comparable U.S. sales exceeded expectations in the first quarter.
“We will do everything we can to keep our prices as low as possible,” CEO Doug McMillon said on the revenue call. “But given the magnitude of the tariffs, we can’t absorb all the pressure even at the lower levels announced this week, given the reality of narrow retail margins.”
McMillon reiterated that while the company tried to cushion consumers, there would inevitably be some impact. “Higher tariffs will lead to higher prices,” he said.
Walmart is the world’s largest retailer and is widely regarded as the leader in consumer sentiment in the United States. It reiterated its full-year outlook, with adjusted earnings per share expected to be between $2.50 and $2.60, with annual sales up 3% to 4% by January 2026.
Analysts Support Walmart’s Method in Tariff Squeeze
Despite the expected price increase, analysts believe Walmart is in a good position and can survive the impact of the tariffs better than many of its competitors. “Demand may drop due to tariffs, but it seems unlikely to collapse,” said Brian Jacobsen, chief economist at Annex Wealth Management, who also noted that it was “logical” to reject profit guidance for the second quarter while maintaining its full-year forecast.
Joseph Feldman of Telsey Advisory Group said Walmart’s extensive product classification allows for increased price flexibility in less obvious ways. “I believe Walmart will handle the impact of tariffs better than most retailers and should continue to provide a large amount of profit,” he said.
Walmart’s same-store sales rose 4.5% in the first quarter, due to increased transaction volume and average spending per visit. The company said shoppers spend more on dairy products, fresh food, food pantry and personal care items.
Still, the confrontation between the White House and major retailers like Walmart seems to be expected to intensify with Trump’s tariff trade policy, especially in China.
(with Reuters input)
