Retailer has weathered the trade war but says the full impact of tariffs on consumers has yet to come

Key Points

Walmart plans to raise prices this month and early this summer due to tariff-affected merchandise.

• Sales rose steadily as shoppers sought deals and fast shipping, but the trade war’s impact has yet to come.
• Walmart didn’t share a profit forecast for the current quarter and may absorb some tariff costs to keep prices lower.

Higher prices are coming to Walmart’s shelves.

The retailer said Thursday that it plans to raise prices this month and early this summer, passing along some of the cost as tariff-affected merchandise hits store shelves. 

“The magnitude and speed at which these prices are coming to us is somewhat unprecedented in history,” Walmart Chief Financial Officer John David Rainey said in an interview. He said sales rose steadily in the latest quarter as shoppers flocked to deals and fast shipping, but the full impact of the trade war on consumers has yet to come.

“It’s a dynamic and fluid environment,” said Rainey. Walmart didn’t share a profit forecast for the current quarter because the company may absorb some tariff costs to keep prices lower than competitors, Rainey said. 

Walmart is already raising some prices as its suppliers pass through higher costs. For example, tariffs drove up the price of bananas, one of the most frequently purchased items at Walmart, to 54 cents a pound, up from 50 cents, he said. 

Earlier this week, the U.S. agreed to temporarily lower tariffs on Chinese imports to 30% from 145%. A 30% tariff on Chinese goods is better than 145%, but still means a meaningful price increase for most consumers, Rainey said.

In March and April, stock markets gyrated and consumer sentiment plummeted, but Walmart’s sales grew. The company’s U.S. comparable sales, those from stores and digital channels operating for at least 12 months, rose 4.5% in the three months ended May 2, beating investors’ expectations.

Unlike many other companies, Walmart left its sales and profit forecasts for the full year unchanged. Previously Walmart had set cautious expectations for its financial performance this year, in part because of the unpredictability of tariffs. Walmart is likely to be a relative winner in a time of economic uncertainty, Rainey said. “We tend to gain share, come out stronger.”

Walmart shares rose around 2% in premarket trading. 

Walmart grew steadily through the pandemic and the period of steep inflation that followed. The Trump administration’s on-and-off-again tariffs have created a new challenge for retailers. Some of those impacts have yet to hit retailers’ shelves, in part because many companies stockpiled goods ahead of the tariffs or postponed shipments from China. So far, the economic impact of tariffs has been muted in the U.S., with unemployment and inflation holding steady. 

Walmart said its consumers in the latest quarter continued to shop cautiously, as they have for the past few years because of inflation on essentials such as groceries and child care. That has been a boon to Walmart. 

Walmart Thursday said more high-income households in the U.S. chose the retailer for groceries, and shoppers embraced its low-price store brand and “rollbacks,” or temporary deals. Overall inflation ticked slightly higher in the latest quarter, primarily due to the price of eggs, the company said. Walmart’s global e-commerce business grew 22% in the quarter.

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