Walmart to Raise Prices Amid Trump Tariff Pressure/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ Walmart reported strong Q1 sales but announced it will raise prices due to new U.S. tariffs under President Donald Trump. The retail giant posted $4.45 billion in profit, down from last year, and expects continued sales growth. CEO Doug McMillon said Walmart cannot absorb all tariff costs despite efforts to hedge.
Tariff Pressure Quick Looks
- Q1 profit fell to $4.45 billion from $5.1B
- Adjusted earnings beat expectations at $0.61 per share
- U.S. same-store sales rose 4.5%, driven by groceries
- Global e-commerce surged 22% vs. 16% last quarter
- Company warns price hikes are inevitable due to tariffs
- Trump’s revised import tariffs still hitting retailers
- Walmart: Two-thirds of products sourced from the U.S.
- Shipping costs expected to spike amid import scramble
- CEO says tariff relief deal is helpful but insufficient
- Walmart maintains full-year outlook despite uncertainty
Deep Look: Walmart to Raise Prices as Trump’s Tariffs Squeeze Margins, Even After Sales Beat
NEW YORK — May 15, 2025 — Walmart Inc. posted solid sales growth for the first quarter of 2025 but said it will be forced to raise prices due to higher costs from President Donald Trump’s tariffs, which have added fresh economic uncertainty to the retail sector.
The retail giant, which often serves as a bellwether for American consumer confidence, reported $4.45 billion in net income for the quarter ending April 30 — down from $5.10 billion a year ago.
Earnings per share came in at $0.61 adjusted, beating Wall Street’s expectations of $0.58, while revenue rose 2.5% to $165.61 billion, just shy of projections.
Sales Up, But Margin Pressure Grows
Walmart’s U.S. same-store sales — a key retail metric — grew 4.5%, slightly lower than the prior quarter’s 4.6% but still strong given broader consumer caution.
Health and wellness items, groceries, and automotive goods performed well, while home and sporting goods lagged. International e-commerce sales soared 22%, up from 16% the quarter before.
Despite the strong performance, CEO Doug McMillon said the retailer cannot fully absorb the cost pressure from the new tariffs on Chinese goods and warned customers to expect price increases in coming weeks.
“We will do our best to keep our prices as low as possible,” McMillon said, “but even at the reduced tariff levels announced this week, we can’t absorb all of it.”
Trump’s Tariff Deal Eases Pressure, But Not Enough
Earlier this week, the Trump administration rolled back some of the threatened 145% tariffs on Chinese imports, lowering them to 30% in a temporary deal that delays broader hikes for 90 days.
While this offers short-term relief, it has done little to end the underlying volatility. Retailers had paused many Chinese imports — including shoes, apparel, toys, and electronics — and are now scrambling to restock shelves ahead of a possible fall tariff surge.
Even with 60% of Walmart’s U.S. business driven by groceries and two-thirds of its goods sourced domestically, the company says it can’t escape the financial fallout from trade policy shifts.
Shipping Surge, Retail Chaos
Retailers are also facing higher shipping costs as companies rush to get products into the U.S. during the 90-day tariff window, adding to inflationary pressure.
Walmart’s hedging strategy has helped insulate its supply chain to a degree, but the low-margin nature of retail makes prolonged tariffs unsustainable without price increases.
Forecasts Clouded by Uncertainty
While Walmart stuck with its full-year guidance from February, it did not issue a profit forecast for Q2 due to the “chaotic” trade environment. However, the company expects sales growth of 3.5% to 4.5% in the next quarter.
Retail competitors are facing similar pressures. Amazon, which also reported strong Q1 earnings earlier this month, managed to dodge some tariff effects by pre-stocking goods before Trump’s latest duties took effect.
“A fair amount of third-party sellers haven’t changed their pricing yet,” said Amazon CEO Andy Jassy, noting that their advance planning helped shield consumers — at least temporarily.
What to Watch
- Will Walmart pass along full tariff costs or partially absorb them?
- How long will Trump’s temporary tariff freeze hold?
- Will consumer spending retreat further amid inflation fears?
- How will Walmart adjust sourcing if tariffs rise again?
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