Walmart has warned customers that it will have to raise prices because of President Donald Trump’s trade tariffs.
The retailer’s chief financial officer John David Rainey told CNBC that the tariffs are “still too high” and price hikes could come in toward the end of this month.
“We’re wired for everyday low prices, but the magnitude of these increases is more than any retailer can absorb,” Rainey told the outlet.
“It’s more than any supplier can absorb. And so I’m concerned that [the] consumer is going to start seeing higher prices,” he said. “You’ll begin to see that, likely towards the tail end of this month, and then certainly much more in June.”
The world’s largest retailer did not issue a profit outlook for the second quarter because of the chaotic economic environment, as Trump’s tariff policies are constantly changing.
Walmart earned $4.45 billion, or 56 cents per share, in the quarter ended April 30, down from $5.10 billion, or 63 cents per share, in the same period last year.
Revenue rose 2.5 percent to $165.61 billion, just short of analyst estimates.
The company’s warning comes as Americans have been pulling back on spending amid economic uncertainty following the president’s global trade war.
Trump’s tariffs on China, which saw the two countries at loggerheads for weeks, and other countries threaten the low-price model that is at the core of Walmart’s success.
Trump’s threatened 145 percent import taxes on China were reduced to 30 percent after the two nations called a truce over the weekend, but the damage appears to have been done.
While Trump was reluctant to lower tariffs against Beijing too quickly, several senior White House staffers warned the president that the penalties were placing his own supporters in danger, the Washington Post reported this week.
The Associated Press contributed reporting
