Walmart Reports Slip in First Quarter Profit Due to Tariffs, Plans Price Increases

NEW YORK — Walmart faced a decline in first-quarter profit, citing higher costs stemming from tariffs imposed by President Donald Trump. The retail giant announced that it will need to raise prices in response to these increased expenses.

Despite the profit setback, Walmart reported strong quarterly sales and projected a sales growth of 3.5% to 4.5% for the second quarter. However, due to the unpredictable nature of current U.S. tariff policies, the company refrained from providing a profit outlook for the upcoming quarter, while maintaining its full-year guidance from February.

In the first quarter, Walmart’s earnings stood at $4.45 billion, or 56 cents per share, down from $5.10 billion, or 63 cents per share, in the same period last year. Adjusted earnings per share reached 61 cents, surpassing analysts’ projections of 58 cents, as reported by FactSet.

The company’s revenue saw a 2.5% increase, reaching $165.61 billion, slightly below analyst estimates. Walmart’s U.S. comparable sales, which include both physical stores and online channels, grew by 4.5% in the second quarter, a slight slowdown from previous quarters.

Shares of Walmart rose nearly 3% before the market opened on Thursday, driven by strong sales in health and wellness products and groceries. However, sales in home and sporting goods were weaker, offset by robust performances in toys, automotive goods, and children’s clothing.

Global e-commerce sales for Walmart surged by 22% in the first quarter, up from 16% in the previous quarter, showcasing the company’s continued growth in online sales.

The impact of tariffs on Walmart’s business has raised concerns, as many American consumers are scaling back on spending amidst economic uncertainties and elevated inflation. President Trump’s tariffs on China and other countries pose a threat to Walmart’s low-price model, which has been integral to its success.

Recent negotiations between the U.S. and China led to a temporary reduction in import taxes on Chinese goods, providing relief to retailers and importers. However, many companies are still expected to raise prices to offset tariff costs, alongside anticipated increases in shipping expenses.

Walmart has strategies in place to mitigate tariff risks, with a significant portion of its merchandise sourced domestically, particularly in the grocery category. Despite these measures, Walmart acknowledges the necessity of price adjustments to address tariff impacts.

CEO Doug McMillon stated, “We will do our best to keep our prices as low as possible, but given the magnitude of the tariffs, we aren’t able to absorb all the pressure due to narrow retail margins.”

As one of the first major U.S. retailers to report financial results, Walmart’s performance serves as an indicator of consumer sentiment and the effects of tariffs on the retail sector. The company’s approach to navigating tariff challenges while maintaining customer value will be closely watched in the coming months.

In a similar vein, Amazon recently announced strong first-quarter results, underscoring its competitive position in the online retail landscape. The company’s proactive approach to tariffs and pricing strategies has allowed it to maintain stability in the face of economic uncertainties.