Walmart Warns U.S. Shoppers Could Pay Higher Prices Due To Tariff Hikes

Walmart Inc has said that U.S. shoppers are likely to end up paying higher prices after higher tariffs came into effect last week.

The leading global retailer reported this as it released what is being summed up as the company’s best quarter one sales growth for the last nine years.

Following the great results, Walmart shares rose by 2.4% in premarket on Thursday morning to $102.30. The stock has already climbed nearly 8% in 2019.

Brett Biggs, the firm’s chief financial officer (CFO) said that consumers should be ready to face increased prices, though the retailer is looking at how it can ease that potential pain point.

According to him, one possible way would be to get products from diverse locations around the world. It will also try to work with suppliers on their respective “costs structures” with the intention of managing the higher tariffs.

And Charlie O’Shea, an analyst from Moody told Reuters that the impact from the tariffs would be limited on both Walmart and its shopping customers due to the fact that it’s mainly in the food business sector.

Walmart’s grocery business, including the fresh food category, brings in about 56% of the company’s overall revenue.

Sales at the company’s U.S. stores that have been open for at least a year increased by 3.4%, except for those in fuel. That rise beat analyst estimates of 3.1%, as noted by the IBES data at researchers Refinitiv.

Walmart’s adjusted earnings also beat analysts estimate as they rose to $1.13 per share. Estimates had put it at $1.02 per share.

Meanwhile, online sales climbed 37%, a drop from 43% recorded in the previous quarter. But that betters the company’s 2019 estimates of 35% growth in online sales.

Total revenue increased 1% at $123.9 billion, lower than an estimate of $125.03 billion. The slight decline is attributed to the impact of currency slowdown as well as reduced international sales. For now, the retailer says it hasn’t seen any signs that there is a slowdown in terms of consumer spending. That, however, is likely to change in coming days due to factors like rising debt, trade conflicts, and overall economic uncertainty.