The escalating trade war between the United States and China could drive up the low costs consumers have come to expect from Walmart.
The retailer, which today posted first-quarter earnings, warned of the impact that increased tariffs could have on shoppers should President Donald Trump make good on his threat to impose duties on almost all remaining imports from China. (On Monday, the Office of the U.S. Trade Representative published a list of about $300 billion in Chinese goods that could be hit with a proposed 25% hike in levies.)
“We’re monitoring the tariff discussions and are hopeful that an agreement can be reached,” CFO Brett Biggs said. “Our goal is to always be the low-price leader, and we will actively manage pricing and margins as warranted with our customers and shareholders in mind. Our merchant teams have been focused on this for months and continue to execute appropriate mitigation strategies.”
Walmart joins Macy’s, Steve Madden, Wolverine Worldwide and more companies that have indicated the need to raise costs to make up for the mounting tariffs, with the fourth tranche expected to include apparel and footwear.
The remarks come as the Bentonville, Ark.-based company reported its best first-quarter comparable sales growth in nine years and earnings that handily topped expectations.
For the three months ended April 30, Walmart delivered profits of $3.84 billion, or $1.33 per share, compared with $2.13 billion, or 72 cents a share, the prior-year period. Adjusted earnings per share were at $1.13, exceeding consensus bets of $1.02.
Total revenues came in 1% higher at $123.9 billion, versus estimates of $124.94 billion, and its same-store sales climbed a healthy 3.4%. E-commerce sales in the U.S. were another bright note, improving 37% during the quarter — driven by robust gains in the fashion and home categories, as well as its online grocery store.
“We’re changing to enable more innovation, speed and productivity, and we’re seeing it in our results,” CEO Doug McMillon said in a statement. “We’re especially pleased with the combination of comparable sales growth from stores and e-commerce in the U.S. Our team is demonstrating an ability to serve customers today while building new capabilities for the future.”
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