Walmart says it will raise prices due to tariff costs after posting solid first quarter sales

NEW YORK AP Walmart s first quarter profit slipped and it commented it must raise prices due to higher costs from tariffs implemented by President Donald Trump The nation s largest retailers posted strong quarterly sales Thursday and declared it expects sales expansion of to in the second quarter Like plenty of other U S companies however it did not issue a profit outlook for the quarter because of the chaotic circumstances with stated U S tariff policies changing constantly The company maintained its full year guidance issued in February Walmart earned billion or cents per share in the quarter ended April down from billion or cents per share in the same period last year Adjusted earnings per share were cents exceeding the cent projections from industry analysts according to FactSet Revenue rose to billion just short of analyst estimates Walmart s U S comparable sales those from established physical stores and online channels rose in the second quarter though that s slowed from a bump in the previous quarter and a increase in the third quarter of Shares rose almost before the opening bell Thursday Business was fueled by medical and wellness items as well as groceries Sales were weaker in home and sporting good which was offset by robust sales of toys automotive goods and kid s clothing the company noted Global e-commerce sales rose up from in the previous quarter Future sales have become a concern for all retailers for a number of reasons A multitude of Americans have been pulling back on spending as they grow uneasy about the financial system and inflation remains elevated Trump s tariffs on China and other countries threaten the low-price model that is at the core of Walmart s success Trump s threatened import taxes on Chinese goods were reduced to in a deal disclosed Monday with a few of the higher tariffs on pause for days Retailers and importers had largely stopped shipping shoes clothes toys and other items with the duties so high but plenty of will now resume importing from China in the narrow window hoping to avoid sparse shelves this fall Yet a large number of retailers say they must raise prices to tariff costs And they are also bracing for higher shipping costs fueled by a surge of companies scrambling to get their goods on ships to the U S Walmart has built in hedges against selected tariff threats Two-thirds of Walmart s merchandise is sourced in the U S with groceries driving much of that Groceries account for roughly of Walmart s U S business Still Walmart isn t immune and explained it will have to raise prices even as it works to absorb the costs of the tariffs We will do our best to keep our prices as low as attainable but given the magnitude of the tariffs even at the reduced levels disclosed this week we aren t able to absorb all the pressure given the reality of narrow retail margins declared CEO Doug McMillon in a comment Walmart is among the first major U S retailers to overview financial results and the numbers can provide a hint as to the mood of the American shopper and how the tariffs are impacting its business Earlier this month Amazon informed higher first-quarter profit and sales that beat analysts projections underscoring the online behemoth s hold on shoppers looking for low prices and a wide selection in an uncertain market system Amazon brought in foreign goods before Trump s tariffs took effect And Amazon s president and CEO Andy Jassy communicated analysts during its earnings call that numerous of its third party sellers did the same And because of that move a fair amount of third-party sellers haven t changed their pricing yet he stated