Walmart's advertising revenue rose 46% year over year, aided by the Vizio acquisition; excluding Vizio, Walmart Connect grew 31% in the U.S. Advertising, membership and marketplace fees supplied roughly half of the retailer's incremental profit in the recent quarter. Strong non-merchandise revenue provides flexibility to absorb some tariff-driven cost increases and helps maintain low consumer prices. Recent tariff hikes have raised import costs, and inventory replenishment at higher post-tariff prices is driving weekly cost increases that are expected to continue into the third and fourth quarters. Quarterly profits fell short of expectations, signaling potential future price increases.
"From a business model point of view, the fact that we have businesses like advertising and membership growing obviously helps with flexibility as it relates to when we decide to absorb part of a tariff cost increase," said Doug McMillon, president and CEO of Walmart, told analysts as the company reported second quarter results Thursday (August 21).
"The way things have played out so far, the impact of tariffs has been gradual enough that any behavioural adjustments by the customer have been somewhat muted," said McMillon. "But as we replenish inventory at post tariff price levels, we've continued to see our costs increase each week, which we expect will continue into the third and fourth quarters."
Collection
[
|
...
]