WALMART WARNS HIGH TARIFFS WILL PUSH CONSUMER PRICES HIGHER By Hernando Ramírez-Santos W almart warned that rising tariffs under President Trump’s trade policies will lead to higher consumer prices, espe- cially for imported food and general merchandise, despite the retailer’s efforts to shield shoppers. The caution came during the company’s first-quarter earnings call for fiscal year 2026. CEO Doug McMillon and CFO John David Rainey described a strong quarter, but emphasized growing concern over cost pressures linked to U.S. tariffs, especially those targeting Chinese goods and Latin American produce. TARIFFS ARE RAISING COSTS “Even at the reduced levels announced this week, we aren’t able to absorb all the pressure,” McMillon said. “Given the reality of narrow retail margins, higher tariffs will result in higher prices.” He pointed to the resurgence of tariffs on goods from China—where Walmart sources many electronics and toys—as particularly impact- ful. Tariffs on agricultural products from Costa Rica, Peru, and Colombia are also driving up costs for bananas, avocados, coffee, and roses. Although Walmart sources two-thirds of its U.S. assortment domestically, McMillon said the share of imports, especially from China, remains significant in certain categories. MANAGING INVENTORY AND MITIGATING IMPACTS Walmart is adjusting inventory flows and working with suppliers to switch from tariff-affected materials—like aluminum—to alternatives such as fiberglass. The company also aims to manage costs by absorbing some tariff impacts within product cate- gories, rather than applying the full increase item by item. “We can adjust the forecast and partner with our suppliers over time,” McMillon said. “It’s helpful that our inventory is well-managed going into Q2.” Walmart is leveraging its growth in eCommerce, advertising, and memberships—businesses with higher margins—to offset cost increa- ses and limit the impact on Walmart consumer prices. SOLID FIRST QUARTER RESULTS Despite tariff concerns, Walmart reported strong first-quarter perfor- mance. Companywide sales grew 4%, with profits up 3% in constant currency. U.S. comparable sales rose 4.5% for Walmart and 6.7% for Sam’s Club, excluding fuel. eCommerce sales jumped 22% globally. McMillon credited these results to Walmart’s broad, replenishable product assortment and impro- ving profitability in newer business segments. “We delivered a good first quarter,” McMillon said. “Our strategy and omnichannel capabilities are strong. We’ll keep getting better in terms of assortment, delivery speed, and scaling our newer businesses.” CFO FLAGS UNCERTAINTY IN FORECASTS CFO John David Rainey echoed McMillon’s cautious optimism, but said that trade policy unpredictability adds risk to the company’s financial outlook. “The range of possible outcomes is much greater than when we originally provided our annual guidance,” Rainey said. He warned that if higher tariffs are restored, they could jeopardize Walmart’s ability to grow earnings year over year. Nonetheless, Rainey said Walmart remains confident it can meet full- year guidance under most scenarios the company has modeled, including those that assume bilateral agree- ments will reduce tariff burdens. “We’re not fully immune, but we’ve modeled various outcomes and still see a path to achieving our goals,” Rainey said. POSITIONED TO ABSORB PRESSURE —BUT NOT ALL OF IT Both executives stressed that Walmart’s scale, domestic sourcing, and diversified revenue streams give it an edge in managing rising costs. But McMillon acknowledged limits. “We're positioned to manage the cost pressure from tariffs as well or better than anyone,” he said. “But even at the reduced levels, the higher tariffs will result in higher prices.” As the second quarter progresses and more tariff-affected inventory hits stores, customers may begin to feel the effects—especially in general merchandise. Walmart pledged to keep food prices as low as possible, even if that means sacrificing margin in other areas. However, the longer tariffs remain elevated, the more pressure builds. SEO FOCUS KEYWORD: WALMART CONSUMER PRICES SEO Metadata: • Title Tag: Walmart Warns Tariffs Will Raise Consumer Prices Despite Mitigation Efforts • Meta Description: Walmart execu- tives warned during the Q1 FY2026 earnings call that U.S. tariffs— especially on Chinese and Latin American imports—will push Walmart consumer prices higher. 20 JULY / AUGUST 2025 ABASTO.COM IN THE NEWS