AKP Phnom Penh, the 16 May 2025--
Walmart on Thursday reported mixed results for its fiscal first quarter ending April 30, narrowly missing revenue expectations as the retailer signaled that rising tariffs are likely to lead to higher prices for consumers.

While the company beat earnings estimates, Walmart CEO Doug McMillon warned that current tariff levels -- despite a temporary reduction on Chinese imports -- are "still too high" for Walmart or its suppliers to fully absorb.

"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," McMillon said Thursday on an earnings call. "The higher tariffs will result in higher prices," he said.

Walmart's revenue for the quarter totaled 165.61 billion U.S. dollars, up 2.5 percent from a year ago but slightly below analysts' expectations of 165.84 billion dollars. Adjusted earnings per share came in at 61 cents, beating the forecast of 58 cents. Net income declined to 4.49 billion from 5.10 billion dollars a year earlier.

While Walmart achieved its first profitable quarter for its e-commerce operations both in the United States and globally, concerns about future pricing overshadowed the milestone. Tariffs on Chinese imports, particularly in categories like toys and electronics, continue to exert pressure, as do duties on products from countries like Costa Rica, Peru, and Colombia, which have affected prices for items such as coffee, bananas, avocados, and roses.

"We're wired for everyday low prices, but the magnitude of these increases is more than any retailer can absorb," Walmart Chief Financial Officer John David Rainey told CNBC. "It's more than any supplier can absorb. And so I'm concerned that consumers are going to start seeing higher prices."

Rainey said the impact would likely start to show toward the end of May and become more noticeable in June. Walmart is working closely with suppliers to maintain value but admitted the speed and scale of cost increases are "a little bit unprecedented."

Trade policy remains a significant uncertainty, with about one-third of Walmart's U.S. merchandise imported from countries including China, Mexico, and Vietnam. While Walmart has not canceled any orders due to tariff concerns, it has scaled back the size of certain shipments to adjust for anticipated changes in consumer demand tied to higher prices. Tariffs have already driven up prices on items like mattresses, toys, and strollers, contributing to higher costs for both businesses and consumers.

According to the Federal Reserve, tariffs have added approximately 0.3 percent to overall prices this year. In response, some companies are raising prices across their product lines, while others are targeting specific items. Many are choosing to remove high-cost products from their offerings altogether, rather than risk losing sales due to price resistance or being undercut by competitors.

Despite these challenges, Walmart reported decent performance last quarter. Comparable store sales rose 4.5 percent, largely driven by gains in its grocery segment. The company also reported increased spending from higher-income customers. Walmart maintained its full-year guidance, projecting sales growth of 3.5 percent to 4.5 percent for the current quarter, although it did not provide updated profit forecasts due to the volatility in trade policy. The company's shares fell slightly in Thursday trading, reflecting investor caution amid the pricing pressures.

Bank of America analyst Robert Ohmes noted this week that Walmart is "well positioned to manage tariffs," thanks to its strong supplier relationships and commitment to low prices. Unlike many of its competitors, Walmart sources only about 15 percent of its merchandise from China, reducing its exposure to tariff-related cost spikes. Additionally, roughly 60 percent of Walmart's inventory consists of groceries, the majority of which are sourced domestically. ■

People shop at a Walmart store in Rosemead, California, the United States, on May 15, 2025. Walmart on Thursday reported mixed results for its fiscal first quarter ending April 30, narrowly missing revenue expectations as the retailer signaled that rising tariffs are likely to lead to higher prices for consumers. (Photo by Qiu Chen/Xinhua)

Shoppers are seen outside a Walmart store in Rosemead, California, the United States, on May 15, 2025. Walmart on Thursday reported mixed results for its fiscal first quarter ending April 30, narrowly missing revenue expectations as the retailer signaled that rising tariffs are likely to lead to higher prices for consumers.

AKP-Xinhua