Walmart beats Q1 earnings, warns of tariff price hikes

Walmart exceeded earnings expectations in the first quarter, reporting 61 US cents per share versus the 58 US cents projected by analysts.

Revenue came in at US$165.61 billion, slightly below the expected US$165.84 billion.

US comparable sales rose 4.5%, while ecommerce sales jumped 21%, marking the 12th straight quarter of double-digit growth.

This quarter also marked the first global profit for Walmart’s ecommerce division, driven by gains in online advertising and its third-party marketplace.

However, Walmart warned that consumers may face price increases soon due to tariffs.

CFO John David Rainey said higher tariffs on Chinese imports are creating cost pressures, despite a temporary cut to 30%.

The company is working with suppliers to manage the impact, but price hikes could start by the end of May and rise further in June.

🔗 Source: CNBC

🧠 Food for thought

1️⃣ Tariffs hit product categories unevenly, creating complex pricing dynamics

History shows tariffs don’t affect all products equally. When NPR tracked prices at Walmart during the 2019 tariff implementation, they found an average price increase of 3% across tracked items, nearly double the inflation rate at that time 1.

The impact varied dramatically by product: dog leashes jumped 35%, while electronics like TVs actually decreased by 12% due to ongoing technology trends 1.

This uneven pattern reflected complex factors beyond just tariffs, including transportation costs and raw materials, with many retailers including Walmart absorbing some costs rather than passing them directly to consumers 2.

The current situation reflects this complexity, with Walmart’s CFO highlighting pressure on specific categories, particularly bananas, avocados, coffee, flowers, toys, and electronics, where China and Latin American imports face the highest tariff impacts 3.

2️⃣ Walmart’s e-commerce profitability arrives at a crucial moment

Walmart’s announcement that its e-commerce business became profitable for the first time comes at a strategically important moment amid these tariff challenges 3.