Tariffs are affecting a larger share of Walmart's imported merchandise than a few months ago. Cost increases are continuing each week and are expected to persist into the third and fourth quarters. Walmart saw lower-than-expected markups in the second quarter and any price increases to consumers have so far been gradual. Some shoppers are skipping purchases or switching to lower-priced alternatives, with middle- and lower-income households adjusting more than higher-income households. Comparable sales rose 4.6%, transactions increased 1.5%, and average receipt grew 3.1% year over year. Strong back-to-school results point toward a robust holiday season.
"We've continued to see our cost increase each week, which we expect will continue into the third and fourth quarters," CEO Doug McMillon said on the call.
"Not surprisingly, we see more adjustments in middle and lower income households than we do with higher income households and discretionary categories," McMillon said.
"As always, our customers are aware, smart, and value-conscious."
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