Walmart Stock Drops as It Signals Price Hikes Due to Trump Tariffs

Walmart has posted a mixed quarterly report morning as it navigates President Trump’s tariffs. Its Q1 revenue rose 2.5% to $165.6 billion, missing Wall Street expectations of $166.02 billion.

Tariffs had already led Walmart to increase prices in April and May. I Photo: MewMeowth Wikimedia Commons

Adjusted earnings per share grew 1.7% year over year to $0.61, beating estimates of $0.58. U.S. same-store sales also beat expectations with a 4.5% increase, led by health and wellness and groceries, Brooke DiPalma reported for Yahoo Finance.

But Walmart stock dropped 5% in early trading as it signaled more pain ahead.

"We will do our best to keep our prices as low as possible, but given the magnitude of the tariffs—even at the reduced levels announced this week—we aren't able to absorb all the pressure given the reality of narrow retail margins," Walmart CEO Doug McMillon said in the release.

He added on the earnings call that tariffs had already led to price increases in April and May.

McMillon said the “reset of costs” will continue throughout the year, noting that “for an imported item, you pay the tariff at the time it comes through customs... even if the tariff rate comes down later, the cost has been elevated.”

Robert Ohmes of Bank of America estimates Walmart imports roughly 15% of its U.S. sales from China.

Around 60% of U.S. sales are groceries, which are largely tariff-exempt if produced domestically or in Mexico and Canada. McMillon said tariffs on countries like Costa Rica, Peru, and Colombia are pressuring imported items such as bananas, avocados, coffee, and roses.