Walmart’s Take on Tariffs

Mega-retailer Walmart (Bentonville, Ark.) expects its first-quarter sales growth to be in line with its previously disclosed 3-4% range and its annual sales and operating income growth guidance remains unchanged. However, the range of results for its operating income growth has widened due to several factors, including a desire to maintain flexibility to invest in keeping prices low as tariffs are implemented.

The world’s largest retailer (more than 10,750 stores and warehouse clubs in 19 countries) disclosed that information at an Investment Community Meeting hosted today (April 9) by company executives, and in a news release that preceded that session.

In its coverage of the investor session, CNBC reported that CFO John David Rainey told attendees that “operating income has been harder to predict and we’ve widened our internal range of scenarios, given the current backdrop.”

In addition, Rainey said Walmart is “still working through what this [new tariff environment] means for us.” About two-thirds of what Walmart sells in the U.S. is made, grown or assembled in the U.S., he said. The third that Walmart imports comes from across the globe, he said, but China and Mexico are the “most significant.”

In his opening remarks at the event, on CEO Doug McMillon acknowledged these are unusual times, CNBC reported.

“Clearly, our environment has changed, so that makes this really exciting for us,” he said, eliciting a laugh from the room of investors, bankers and reporters. “…It’s clearly a fluid environment. And while we don’t know everything that’s going to happen, of course, we do know what our priorities are, and we know what our purpose is, and we’ll be focused on keeping prices as low as we can.”