FOX Business’ Gerri Willis reports on how a tariff war between the U.S. and China can impact retail products and companies that move through global markets.
Walmart – the nation’s largest private employer – warned of possible price hikes on Thursday given the uncertainty in the tariff environment.
“We will do our best to keep our prices as low as possible but given the magnitude of the tariffs, even at the reduced levels announced this week, we aren’t able to absorb all the pressure given the reality of narrow retail margins,” Walmart CEO Doug McMillon said in a statement as the retailer reported its first quarter results, which met Wall Street expectations.
Despite the tariff uncertainty, the company said it “will play offense and may opportunistically invest” in areas to improve its value proposition.
McMillon is one of a handful of notable executives that recently met with President Donald Trump to discuss ongoing trade negotiations with other nations and the impact of tariffs imposed on imported products. A Walmart spokesperson told FOX Business that McMillon’s meeting with Trump and his team last month was “productive,” and that the company appreciated the chance to share its insights.
COSTCO, WALMART ARE APPEALING TO WEALTHY SHOPPERS
The Arkansas-based company, which economists use as a gauge to understand consumer health, reported revenue of $165.6 billion, which is in line with expectations. Adjusted earnings per share slightly beat Wall Street expectations.
FILE PHOTO: A shopper browses for clothing at a Walmart store in Flagstaff, Arizona, Oct. 19, 2022. (REUTERS/Lisa Baertlein/File Photo / Reuters Photos)
For the first time, its e-commerce business achieved a full-quarter of profitability in the U.S. and worldwide. E-commerce sales grew 22%. Sales at U.S. stores open for at least a year grew 4.5% due to the strong growth in the health and grocery segments.
However, the company saw weakness in the general merchandise category, which are typically higher margin products. The company specifically reported weaker sales in electronics, home, and sporting goods. However, that was offset by strength in toys, automotive and kids apparel, Walmart said.
Customers shop at a Walmart store on May 18, 2023 in Chicago, Illinois. (Scott Olson/Getty Images / Getty Images)
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The company said that the “lack of clarity that exists in today’s dynamic operating environment makes the very near-term exceedingly difficult to forecast.”
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| WMT | WALMART INC. | 96.83 | +0.95 | +0.99% |
Still, it remains confident that Walmart net sales will grow 3.5% to 4.5% in the second quarter. However, Walmart said that, given that trade talks and related news are constantly shifting, sometimes daily, “the range for operating income of outcomes for the quarter is much wider.”
The company still expects full-year net sales to grow 3% to 4%.