Costs are "increasing every week"! Walmart warns that the impact of tariffs will "last until the third and fourth quarters."

The world's largest retailer, Walmart, recently warned that U.S. tariffs are driving up its operating costs, and the impact is expected to continue into the third and fourth quarters.

On August 21, according to media reports, Walmart stated that even with more customers flocking to its stores seeking affordable products, profit margins are still under pressure. The company's CEO Doug McMillon warned that as inventory is replenished at post-tariff price levels, costs "are increasing every week," and this impact is expected to last into the third and fourth quarters.

According to a previous article by Jianwen, Walmart's latest financial report shows that the company's revenue grew by 4.8% to $177.4 billion in the second quarter, exceeding expectations, and it raised its full-year sales guidance. However, operating profit fell by 8.2% to $7.3 billion, which was below expectations. As a result, Walmart's stock price fell 4.5% on Thursday, marking the largest single-day decline in over four months.

Walmart's warning about the impact of tariffs comes as investors closely examine corporate earnings reports and economic data, looking for clues on whether tariffs will trigger a new wave of severe inflation. Federal Reserve Chairman Jerome Powell is scheduled to deliver a highly anticipated speech at the central bank's Jackson Hole meeting on Friday, where he is expected to provide the latest insights on how tariffs are affecting U.S. prices.

Tariff Cost Pressure Increasing Weekly

Walmart revealed that as the Trump administration's tariff policies on trade partners are implemented, the cost of goods sold by the company has begun to rise. McMillon noted, "So far, the impact of tariffs has been gradual, and the adjustment in customer behavior has been relatively mild."

However, the situation is changing. About one-third of Walmart's U.S. goods rely on imports, primarily from countries such as China, Mexico, Vietnam, and India. As the company replenishes inventory for the holiday shopping season, procurement costs continue to rise.

The financial report shows that the company's same-store inflation rate rose by 1.1% year-on-year in the second quarter, doubling from the previous quarter, but still below the overall U.S. inflation rate. Walmart stated that despite price reductions on some food items, the U.S. grocery inflation rate still rose by about 1.5%, while prices for general merchandise such as clothing and electronics saw declines.

Earlier this year, Walmart warned that it would need to raise prices on some goods to offset tariff costs, a statement that drew sharp criticism from President Trump. Trump insists that tariffs will not lead to inflation and has called for significant interest rate cuts by the Federal Reserve.

McMillon also stated that while there has not yet been a drastic change in consumer behavior due to tariff-related spending, "not surprisingly, we see more adjustments among middle- and low-income households than among high-income households."