Walmart said in February that it wasn’t “immune” from the costs of President Donald Trump’s tariffs. Now it’s preparing shoppers to pay more, potentially within weeks.
The retail giant is likely to start rolling out tariff-related price hikes “towards the tail end of this month, and I certainly expect more in June,” Chief Financial Officer John David Rainey told CNBC on Thursday, as the company reported earnings that exceeded Wall Street’s expectations. Sales rose by 4.5% at U.S. stores, and the company’s e-commerce business notched its first profitable quarter.
Walmart is the nation’s largest private-sector employer, with a 1.6 million-strong U.S. workforce and 4,700 locations, which it says are within 10 miles of 90% of the population. The company pulled in $165.6 billion in revenue in the first quarter.
But despite Walmart’s huge footprint at the center of the consumer economy, Rainey said “it’s a challenging environment to operate in retail right now,” speaking separately Thursday to Bloomberg. He indicated the Trump administration has further to go to resolve cost pressures that have risen at a scale and speed without “historical precedent,” echoing analysts on the heels of recent truces with the U.K. and China.
Walmart’s stock was trading about 3.6% lower Thursday morning following its earnings report. Since Trump unveiled sweeping global tariffs on April 2 — then partially walked them back days later — its shares have risen 3.4%, outpacing the gains of Target and Costco, and remain up 2.9% since the start of the year.
CEO Doug McMillon told investors Thursday that Trump’s 145% tariffs on China have had “the biggest impact” on the many toys and electronics Walmart sources there. He thanked the president for recent “progress” after the U.S. agreed to lower its effective tariff rate on China to 30% for a few months. “We’re hopeful that it leads to a longer-term agreement” and lower duties, he said.
Rainey added on the investor call that many tariffs remain too high. Duties that in some cases are “approaching 50% for other countries is not a good outcome for retailers, not a good outcome for the economy,” he said.
A White House spokesperson didn’t immediately respond to a request for comment.
Walmart is feeling pressure to raise prices on bananas, avocados, coffee and roses due to tariffs on Costa Rica, Peru and Colombia, McMillon said. He promised the retailer would “do our best to control what we can control in order to keep food prices as low as possible.”
That could include absorbing higher prices and opting to “not simply pass on a tariff cost attributable to each item individually,” McMillon said. “We also have suppliers shifting materials from tariff-impacted components like aluminum to fiberglass, where there is no tariff. Our merchants, sourcing team and suppliers are being creative.”
Large companies typically have the most leeway to make adjustments like these. For many smaller operators, tariffs pose an existential threat that could allow big corporate rivals to expand their market shares, as the powerful U.S. Chamber of Commerce and independent shop owners themselves have warned.
“If Walmart’s coming out — with its scale and its buying power and its focus — and saying prices are going to rise, everyone else is going to have to follow suit,” said Neil Saunders, managing director at retail consultancy GlobalData. “Walmart is firing the starting gun on a period of price increases.”
Already, a number of companies that sell products at Walmart, such as Stanley Black & Decker, Adidas, Mattel and Procter & Gamble, have raised prices or signaled expected hikes.
“Should the duties go away, there will of course not be price increases,” Adidas CEO Bjorn Gulden said in late April. “Should this duty stay or even be higher, then of course it will cause a price increase in the market in general.”
Saunders said he expects grocery prices across the retail industry to rise 3% to 5% by the end of this year, while merchandise more dependent on global sourcing could jump by 5% to 7%.
“It’s not just the odd 1% that people can almost absorb and ignore,” he said. “We’re looking at reasonably substantial inflation.”
Other big-box retailers, including Home Depot, Lowes, Target and BJ’s Wholesale, are set to report first-quarter earnings next week. Several major consumer brands have already revised or scrapped their financial outlooks for the rest of the year, struggling to game out how ever-shifting trade policies will affect them.
Walmart, for its part, maintained its 2025 sales and profit guidance. But it decided not to offer guidance on operating income or earnings per share for the second quarter now underway, due to “the range of near-term outcomes being exceedingly wide and difficult to predict.”
Nationwide, retail sales rose just 0.1% in April, down sharply from a revised 1.7% increase in March, new federal data showed Thursday. Last month’s level was in line with analysts’ expectations but reflects consumers tightening their belts after a buying spree in which many scooped up products before more tariffs hit.
Walmart said Thursday that it brought in new customers last month and saw growth among shoppers of all income levels.
“They’re maybe a little concerned about possible looming price increases,” Rainey told CNBC. But so far, “their behaviors largely have not changed,” he said. “They’re still looking for value.”
