Walmart reported another quarter of solid sales on Thursday, but the retail giant, known for its low prices, cautioned that President Trump’s tariffs pose a challenge in keeping prices down.
Walmart, the largest retailer in the United States, said on Thursday that sales at its U.S. stores rose more than 3 percent, to $112.2 billion, in its most recent quarter, which ran through April. The company’s e-commerce sales jumped more than 20 percent, with the fast-growing segment recording its first-ever profitable quarter.
The retailer kept its full-year financial forecast unchanged from its previous projection in February, with revenue expected to increase 3 to 4 percent this year. Many other large companies have recently scrapped their forecasts, saying that it was too difficult to make predictions under the Trump administration’s on-again, off-again tariff policies.
But even as Walmart’s sales remain strong and its projections hold steady, executives said tariffs would likely weigh on the company and may lead to higher prices for shoppers.
“We will do our best to keep our prices as low as possible but given the magnitude of the tariffs, even at the reduced levels announced this week, we aren’t able to absorb all the pressure given the reality of narrow retail margins,” Doug McMillon, Walmart’s chief executive, said in a statement on Thursday.
The latest quarter spanned three months during which tariffs roiled corporate America, and Wall Street analysts and investors closely watched Walmart’s report for any signs of Mr. Trump’s trade wars on the retail sector. Mr. Trump unveiled a suite of tariffs on dozens of countries in early April. On Monday, the Trump administration temporarily lowered tariffs on many Chinese imports to 30 percent, down from the 145 percent rate that had been in place for nearly one month.
Walmart executives have in recent months acknowledged uncertainty as to how tariffs might affect the company’s bottom line, while stressing that the retail behemoth is well positioned to navigate the turmoil. At its previous earnings call, in February, the retailer warned investors of slower growth ahead, as shoppers faced stubborn inflation and the impact of tariffs.
At an investor event on April 9, which coincided with a major trade-war escalation, executives emphasized that two-thirds of what Walmart sells in the United States is made, grown or assembled domestically.
Retail industry observers agreed that Walmart is more insulated from tariff-induced cost increases than many of its competitors. Walmart’s large grocery business, much of which is sourced in the United States, limits the company’s reliance on imports, said analysts at Bank of America. But they cautioned that Walmart is not immune to cost increases stemming from tariffs.
“The company has scale, strong relationships with vendors, strong relationships with consumers. That will help them,” said David Silverman, a retail analyst at Fitch Ratings. “That being said, they’re a significant importer.”
As the entire retail sector continues to face down the economic effects of the Trump administration’s policies, Walmart’s relatively favorable position compared to its competitors “will probably become even more evident as the year unfolds, when the operating environment could become much more challenging,” analysts at UBS said in a research note.
Walmart brings in millions of customers each week, making it a bellwether for U.S. consumer trends. Consumer sentiment has been falling, dampened by concern about tariff-related price increases and the outlook for the job market. Consumer-facing companies have started to point to a pullback in spending as a result. Walmart has gained market share by attracting more higher-income shoppers in recent years, but its customer base includes a large number of lower-income shoppers, who have less capacity in their budgets to pay the higher prices that the tariffs could bring.
“Walmart is not the lowest cost provider out there,” Mr. Silverman said, adding that the company, over time, could be negatively affected by a pullback among lower-income shoppers. “It has a low price positioning, but it not the lowest.”
Danielle Kaye is a Times business reporter and a 2024 David Carr Fellow, a program for journalists early in their careers.
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