Walmart Faces Price Hikes Amid Tariff Pressures

Walmart has announced plans to raise prices later this month as a result of escalating tariff costs, despite the company's U.S. comparable sales outperforming expectations in the first quarter. The retail giant, based in Bentonville, Arkansas, saw its shares rise by 3.5% in pre-market trading. While Walmart's stock has climbed over 60% during the past year, the company refrained from providing second-quarter profit guidance due to ongoing uncertainties related to tariffs instigated by former President Donald Trump.

Walmart's Chief Financial Officer John David Rainey told CNBC that U.S. shoppers should expect to see price increases by the end of May and certainly by June. CEO Doug McMillon emphasized Walmart's commitment to maintaining affordable prices, although he acknowledged the difficulty in fully absorbing tariff-related pressures. The retailer, nevertheless, confirmed its annual sales and profit forecast for fiscal year 2026, projecting adjusted earnings per share of $2.50 to $2.60 and annual sales growth between 3% and 4%. As a key indicator of U.S. consumer health, Walmart's results provide insights into how the retail sector is managing the economic volatility exacerbated by intermittent tariffs, including those on China.

For the first quarter, Walmart reported a 4.5% growth in same-store sales, with increases in transactions and unit volumes. Transactions rose by 1.6%, and the average spend grew by 2.8%, driven by purchases of dairy, pantry items, fresh food, and personal care products. Analysts had predicted a 3.94% rise in U.S. same-store sales. The company's net sales increased by 2.5% to $165.6 billion, slightly below estimates, while e-commerce sales in the U.S. and globally rose by 21% and 22%, respectively. This marks the first time Walmart's e-commerce business achieved quarterly profitability. Although the U.S. and China recently reached a trade deal to reduce tariffs for 90 days, easing investor concerns, many U.S. companies remain cautious. Amid consumer sentiment declines and GDP contraction, Walmart continues to focus on its low-price strategy, predicting 3.5% to 4.5% growth in second-quarter consolidated net sales, withholding operating income growth forecasts.

(With inputs from agencies.)