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These days. |
Y'all voted for this.
Y'all will be paying for this.
Y'all will end up regretting this.
The nation's largest discount retailer announced it will raise its prices. Memorial Day, the unofficial start of summer and consumer spending if not already.
Walmart, based out of Bentonville, Arkansas is the country’s biggest retailer.
The discounter beat quarterly earnings expectations and stuck by its full-year forecast, which calls for sales to grow 3% to 4% and adjusted earnings of $2.50 to $2.60 per share for the fiscal year. That cautious profit outlook had disappointed Wall Street in February, but the company’s shares rose slightly on Thursday in premarket trading.
Walmart says that President Donald J. Trump's tariffs are the cause of the price increases.
Walmart is often seen as a barometer for the health of the U.S. consumer because of its thousands of stores and large customer base that cuts across age, income and region. Rainey told CNBC that Walmart has not seen a noticeable shift in consumer behavior from previous quarters.
“They’re discerning. They’re mindful. They’re maybe a little concerned about possible looming price increases, but their behaviors largely have not changed. They’re still looking for value,” he said.
Sales in the quarter were “a little choppy,” Rainey said. He said results in February fell below the company’s expectations, March results came in closer to what Walmart expected and then April “was a lot stronger.” So far, he said May “feels a lot more like April” with sales patterns.
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Soon AI and robots will replace stock photos of Walmart employees. |
Average ticket, or the amount that a customer spent, rose 2.8% year over year. Customer transactions increased 1.6% compared with the year-ago period in the U.S. Yet despite the growth of purchases across Walmart’s store and website, that marked the fourth straight quarter of deceleration for the metric.
Trade remains a major wild card for the company — and the retail industry — as companies debate how much inventory to order and place bets about where tariff levels will ultimately land. About a third of what Walmart sells in the U.S. comes from other parts of the world, with China, Mexico, Canada, Vietnam and India representing its largest markets for imports, Rainey said on the company’s earnings call Thursday.
CEO Doug McMillon said on the company’s earnings call that tariffs on China, in particular, create the greatest cost pressure. He said imports from the country account for high volume in categories such as toys and electronics.He said Walmart is focused on keeping food prices low, but said tariffs on countries like Costa Rica, Peru and Colombia have put pressure on the prices of bananas, avocados, coffee and roses. In some cases, he said, it’s keeping prices where they are — even if that means absorbing higher costs — such as keeping the price consistent for flowers at Sam’s Club on Mother’s Day.
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