Walmart Faces Tariff Challenges: Price Hikes on the Horizon

Walmart announces upcoming price hikes due to increased tariffs, impacting its U.S. customers. Despite surpassing sales expectations in the first quarter, the company withholds second-quarter profit guidance, expressing concerns over ongoing tariff uncertainties. As consumer sentiment ebbs, Walmart strives to balance cost pressures while keeping prices competitive.

Walmart is preparing to raise its prices later this month due to the burden of high tariffs, the company revealed on Thursday. Despite these challenges, the retail giant's U.S. comparable sales outperformed projections in the first quarter, boosting its stock by 2% in pre-market trading.

In light of the uncertain landscape shaped by President Donald Trump's tariff measures, Walmart opted to withhold its second-quarter profit guidance. Prices are expected to rise by the end of May, as CFO John David Rainey stated during a CNBC interview, emphasizing the difficulty in absorbing the tariff costs.

CEO Doug McMillon acknowledged the narrow margins in retail limit their ability to shield customers from rising prices. Analysts suggest that while Walmart may find efficiencies to counteract some tariff effects, complete protection is unlikely. The company maintains its full fiscal year forecasts, projecting stability despite current challenges.

(With inputs from agencies.)