Tariff impacts are coming! Walmart warns: We cannot keep prices unchanged forever

Global retail giant Walmart released robust quarterly results, but simultaneously warned that due to tariffs and escalating economic turmoil, the company will raise prices on some products starting this month.

The financial report shows that for the quarter ending April 30, Walmart's U.S. same-store sales grew by 4.5%, with adjusted earnings per share of $0.61. This performance exceeded Wall Street analysts' expectations, indicating that its strategy of lowering prices to gain market share is working.

However, the shadow of erratic tariff policies looms, causing a slowdown in Walmart's transaction growth and fluctuations in sales, with grocery and pharmacy sales remaining strong while sales of daily necessities declined. Worse still, the price increases triggered by tariffs are expected to soon affect the shelves.

Walmart's Chief Financial Officer John David Rainey stated in an interview:

"If you haven't seen it yet, it will happen in May, and then it will become more apparent."

This means that consumers relying on Walmart's low-price strategy will soon feel the impact of tariffs.

Tariff Shadow Looms, Retail Industry Faces "Critical Point"?

Although the company plans to maintain its full-year sales and profit guidance, due to "ongoing trade discussions that change weekly, if not daily," the company chose not to provide revenue guidance for the current quarter. The company stated:

"In today's dynamic operating environment, the lack of clarity makes it extremely difficult to predict very near-term outcomes."

Rainey noted that the range of outcomes is "quite extreme," and the company is preparing for greater impacts from the trade war and overall economic downturn in the coming months.

Trump's tariffs have disrupted operations across various industries. In recent weeks, most consumer-facing U.S. companies have reported weak performance due to unstable demand and economic weakness. Procter & Gamble and Kraft Heinz have cut their annual outlooks, while airlines like Southwest Airlines have expressed concerns about an impending economic recession.

"The current retail environment is challenging, with prices rising so quickly. There has never been a precedent for prices rising this high and this fast in history," Rainey stated:

"The magnitude of the tariff increases is such that retailers cannot absorb these costs themselves."

Walmart Warns: More Tariff Pain Ahead

In the face of various challenges, Walmart's positioning is more advantageous than other retailers. The company's global supply chain allows it to source products from multiple regions, and its scale means it can negotiate better deals with suppliers.

Despite Walmart's strong performance, it still warns investors of more tariff pain ahead, which is an ominous sign.

Rainey noted that compared to last year, this quarter saw greater week-to-week fluctuations in sales, pointing out factors putting pressure on short-term profits: after the implementation of tariffs, the company hopes to be ready to invest in prices, while consumers are buying more groceries that typically have lower margins. Categories such as electronics, home goods, and sporting goods have already been impacted, and the rise in egg prices this quarter is also noteworthy