Walmart delivered another robust quarterly performance on Thursday but cautioned that the lingering effects of tariffs imposed by President Donald Trump on Chinese goods and other key imports would inevitably translate into higher consumer prices.
Speaking during an earnings call with analysts, Chief Executive Officer Doug McMillon acknowledged the company’s ongoing efforts to mitigate the financial burden on shoppers but conceded that the scale of the tariffs — even after recent reductions — made it impossible to fully absorb the cost increases.
While executives welcomed the latest easing in US-China trade tensions announced earlier this week, they stressed that the tariff levels on Chinese imports, particularly in categories such as electronics and toys, remained unsustainably high.
Chief Financial Officer John David Rainey further warned that consumers should brace for noticeable price hikes beginning in the latter half of May, with the full impact expected to become more pronounced by June.
“If you’ve got a 30 percent tariff on certain items, you’ll likely see a double digit” price increase, Rainey said in an interview with Yahoo Finance.
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Walmart officials said the extent to which tariffs are passed on to consumers will depend on the individual item.
Rainey said Walmart saw an opportunity to play “offense” with some products, meaning the retail giant could absorb more of the tariff to keep prices lower and boost its market share.
“We could see higher prices on some non-tariffed items and stable or even lower prices on some tariffed products,” said CFRA Research senior equity analyst Arun Sundaram.
Walmart reported quarterly earnings of $4.5 billion, representing a 12.1 percent decline from the same period last year, yet surpassing Wall Street projections. The retail behemoth also posted a 2.5 percent increase in revenue, reaching $165.6 billion, driven in part by a 4.5 percent gain in same-store sales within its US division, fueled largely by continued strength in grocery sales.
Despite the solid topline performance, CEO Doug McMillon acknowledged that the retailer remains under mounting pressure from tariffs, particularly those stemming from the ongoing trade tensions initiated under the Trump administration. While Walmart’s sheer scale allows it to offset some of these costs without directly impacting consumers, McMillon noted that the company cannot fully neutralize the impact across all categories.
He pointed to instances where suppliers have pivoted toward alternative materials not subject to tariffs — such as substituting fiberglass for aluminum — as part of cost mitigation strategies. However, McMillon also highlighted the persistent burden of tariffs on key imports from countries including Costa Rica, Peru, and Colombia, affecting products like bananas, avocados, coffee, and cut flowers.
McMillon affirmed that they remained focused on managing the factors within their control in order to keep food prices as affordable as possible for their customers.