Walmart CFO John David Rainey has warned that the discount retailer may have to raise prices if President-elect Donald Trump’s proposed tariff plan is enacted.
“We never want to raise prices,” Rennie said CNBC on Tuesday. “Our model is everyday low prices. But there will probably be cases where the prices for consumers will go up.
He did not say which commodities would be affected by the tariffs. Walmart reported another quarter of stronger-than-expected earnings on Tuesday, thanks in large part to its lower prices that continue to resonate with inflation-stricken consumers. A Walmart spokesperson said good luck Any price changes are speculative at this point, but future cost increases due to tariffs will be an additional burden to already price-sensitive buyers.
“We are concerned that a significant increase in tariffs could lead to increased costs for our customers at a time when they are still feeling the remnants of inflation,” the spokesperson said in a statement. I said.
According to the company, two-thirds of its dollars are spent on products manufactured, assembled or grown in the U.S. is navigating the tariff in some capacity, and intends to work with government officials and suppliers to minimize its impact. keeps Any significant tax on consumer prices.
Trump, a self-proclaimed “tariff man,” has made tariffs a key part of his platform, with an aggressive plan that includes a 60% tax on all Chinese imports and 10% on imports from all other countries. % tax included. While the former president argued that the tariffs would help boost America’s manufacturing power, the Peterson Institute for International Economics warned that the proposed tariffs would cost middle-class households between $1,700 and $2,600 a year. Depends on how aggressive Trump’s plans are.
Rainey’s sentiments echo those of nearly 200 companies in the S&P 1500 that have mentioned the tariffs in earnings calls or conferences with investors since the start of September, according to the London Stock Exchange Group. Companies from Lowe’s to beauty brand Elf have already begun strategizing how to mitigate the impact of taxed imports. Since 2019, Elf has reduced the proportion of products sourced from China from 99% to 80%.
“We’ve certainly run a number of scenarios for potential tariffs and I think it’s too early to say what level they might come to,” elf CFO Mandy Fields said on a Nov. 6 earnings call. “But we have a playbook and we have a lot of levers.”
But beyond the potential impact of tariffs, Walmart is also concerned about the impact of the Ozympic boom. After Walmart said last year that its use of GLP-1 agonists hurt food sales, CEO Doug McMillan added during Tuesday’s earnings call that higher demand for the drug had created “margin pressure” for the company. What is, and can affect sales in other categories.
“The margin gains we reported this year in the U.S. were offset by meaningful product headwinds due to increased overseas sales in health and wellness relative to general merchandise,” McMillan said.
