Walmart to Increase Prices Amid Tariff-Related Costs

Walmart's first-quarter profit slipped due to higher costs from tariffs implemented by President Donald Trump. The company announced it will increase prices to offset the increased costs.

The nation's largest retailer posted strong quarterly sales and expects sales growth of 3.5% to 4.5% in the second quarter.

Walmart earned $4.45 billion, or 56 cents per share, in the quarter ended April 30, down from $5.10 billion, or 63 cents per share, in the same period last year. Adjusted earnings per share were 61 cents, exceeding the 58 cent projections.

Revenue rose 2.5% to $165.61 billion, just short of analyst estimates. Walmart's U.S. comparable sales rose 4.5%, fueled by health and wellness items as well as groceries.

"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," said CEO Doug McMillon in a statement.

Walmart's global e-commerce sales rose 22%, up from 16% in the previous quarter. The company's success relies on its low-price model, which is threatened by Trump's tariffs on China and other countries.

Trump's threatened 145% import taxes on Chinese goods were reduced to 30% in a deal announced Monday, with some of the higher tariffs on pause for 90 days. Many retailers say they must raise prices to absorb tariff costs and are also bracing for higher shipping costs.

Walmart has built in hedges against some tariff threats, but still acknowledges it will have to raise prices. The company is among the first major U.S. retailers to report financial results, providing a hint as to the mood of the American shopper and how the tariffs are impacting its business.