Trump meets with retail CEOs to discuss tariffs
President Trump recently met with executives from major retailers, including Walmart, Home Depot, Law and Target, to discuss the impact of his tariffs.
Cheddar
Walmart needs to start raising prices later this month due to high tariff costs, executives said Thursday, but executives said even if retailers’ US equivalent sales exceeded expectations in the first quarter.
The Bentonville, Arkansas-based company saw a 2% increase in pre-market trading. That inventory has grown by more than 60% over the past year.
Walmart has been the latest to avoid giving second-quarter profit guidance on May 15th due to uncertainty over Donald Trump’s tariffs that shook global trade.
Prices began to rise at the end of May, and certainly in June, Walmart’s chief financial officer, John David Rainey, said in an interview with CNBC.
“We will do our best to keep prices as low as possible, but given the magnitude of the tariffs, even the levels of decline announced this week cannot absorb all the pressure given the narrow reality of retail margins,” CEO Doug McMillon said in a statement.
Analysts said Walmart can lean on suppliers to narrow down efficiency and protect customers from tariffs, but that can do that for a long time.
“There will be destruction of demand from tariffs. A complete shipwreck is unlikely,” said Brian Jacobsen, chief economist at Annex Wealth Management.
Joseph Feldman, an analyst at the Telsey Advisory Group, said he hopes to increase the flexibility to spread price hikes for the wide range of products offered by Walmart.
“My feeling is that Walmart controls (customers) more than almost every other retailer, and they will be able to continue generating solid profits,” Feldman said.
On Thursday, retailers maintained their forecasts for annual revenue and profits for fiscal year 2026. Adjusted revenue for the fiscal year ending January 2026 continues to grow between $2.50 and $2.60, with annual revenue continuing to grow between 3% and 4%.
Jacobsen said it makes sense for Walmart to withhold second quarter profit guidance and felt they were encouraging them not to pull full-year forecasts. He expects the effects of fluctuating tariffs to balance over longer time frames.
It attracts consumer sentiment
Many US companies have reduced or elicited year-round expectations as consumers grow their budgets and buy everything from food to essentials at cheaper prices, resulting in the trade war.
US consumer sentiment fell for the fourth consecutive month in April, while GDP signed for the first time in three years amid concerns about a recession.
Walmart is home to US consumer health and was the first to launch results for the US retail industry. The report provides clues as to how the industry is being deprived of economic volatility due to on and off tariffs in several countries, including China.
The company said sales for the same store in the first quarter increased 4.5%, up from an increase in both the trading and unit volume. Transactions rose 1.6%, but averaged 2.8%.
Analysts on average expected US storey sales to increase by 3.94%, according to data compiled by LSEG. Net sales increased 2.5% to $165.6 billion, with hair estimated.
US e-commerce sales rose 21%, but globally increased 22%. It was the first time Walmart’s e-commerce business has achieved a full quarter of profitability and benefited from a higher margin business, including online advertising and its market, the company said.
Retailers reported quarterly adjusted earnings of 61 cents per share. Analysts were, on average, expecting 58 cents per share.
We expect consolidated net sales to be between 3.5% and 4.5% in the second quarter, compared to growth expectations of 3.46%.
CFO Rainey said second quarter operating income growth and earnings per share are withholding forecasts as the range of short-term results expands and difficult to predict.
“I believe that if we look at the whole year long, we can navigate well and achieve year-round guidance,” he added.
