Walmart signals price hikes ahead

Walmart reported a dip in first-quarter profit, citing the mounting cost pressures from tariffs imposed by the current administration as a key challenge. Despite a 2.5 per cent rise in revenue to 165.61bn dollars and stronger-than-expected adjusted earnings per share of 61 cents, the retail giant said it will be forced to raise prices in the coming months, reported the Associated Press.

Profit slipped to 4.45bn dollars down from 5.10bn dollarsa year earlier, as the world's largest retailer grappled with shifting trade policy and fragile consumer sentiment. While U.S. comparable sales grew by 4.5 per cent and e-commerce surged 22 per cent, Walmart declined to provide a second-quarter profit outlook, citing ongoing volatility in U.S. trade policy.

Fashion and home categories underperformed, though strength in kidswear and automotive goods helped offset the drag. Many apparel retailers had paused Chinese imports amid steep tariffs, but are now rushing to restock during a temporary reprieve, as tariffs were reduced to 30 per cent in a deal announced this week.

Walmart CEO Doug McMillon said the retailer, whose narrow margins leave little room to absorb cost hikes, would need to pass some of the tariff burden on to consumers despite hedging strategies and a domestic-heavy sourcing model.

Shares rose 3 per cent pre-market as investors focused on sales resilience and Walmart’s reaffirmed full-year guidance. However, with inflation lingering and tariffs squeezing supply chains, fashion and general merchandise retailers face an increasingly complex operating environment.