Walmart Chief Financial Officer John David Rainey said on Thursday that shoppers may start to see higher prices on some products later this month due to rising tariffs on imported goods.
The warning came as Walmart reported its first-quarter earnings, beating profit expectations but falling just short on sales.
Key Numbers
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Earnings per share: 61 cents (vs. 58 cents expected)
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Revenue: $165.61 billion (vs. $165.84 billion expected)
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Net income: $4.49 billion
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U.S. same-store sales: Up 4.5%
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Sam’s Club same-store sales: Up 6.7% (excluding fuel)
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U.S. e-commerce sales: Up 21%
Walmart also announced that its e-commerce business turned profitable for the first time in both the U.S. and international markets.
Price Hikes Coming
Rainey said that even with some tariff relief on Chinese goods, prices are still too high for Walmart and its suppliers to fully absorb. He warned that price increases may start appearing by the end of May and become more noticeable in June.
“This is more than any retailer or supplier can absorb,” Rainey said in an interview with CNBC.
Items likely to be affected include toys, electronics, bananas, avocados, coffee, and flowers, which are imported from countries like China, Costa Rica, Peru, and Colombia.
Shoppers Still Spending
Despite inflation concerns, Walmart said customers are still shopping and looking for value. Rainey said sales were mixed during the quarter, with a slower February, average March, and a strong April. May is showing strong sales so far.
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Customer spending per trip: Up 2.8%
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Transactions: Up 1.6%
Looking Ahead
Walmart expects sales to grow 3.5% to 4.5% in the second quarter but did not give an earnings forecast, citing uncertainty over tariffs.
CEO Doug McMillon said Walmart will try to keep prices steady for everyday items like food and flowers, even if it means taking a hit on profits.
Stock Performance
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Walmart shares are up 7% so far in 2025
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The company’s market value is around $775 billion
Walmart’s report kicks off earnings season for major retailers like Target, Home Depot, and Lowe’s, who will report their results next week.
