Walmart's comparable U.S. sales rose 4.6% in the quarter ended July 31, materially outperforming rival Target. Reported profit missed Wall Street forecasts as the company absorbed some tariff-driven cost increases and passed others onto customers. U.S. prices rose about 1% during the quarter. Tariff impacts are being managed on an item-by-item and category-by-category basis through accelerated imports and temporary promotions labeled Rollbacks. The company kept consumer prices deliberately low in many areas to preserve demand. The fuller effect of higher tariffs is expected later in 2025 as inventory is replenished.
The massive big-box chain said that comparable U.S. sales in the quarter ended July 31 rose 4.6%, more than analysts expected and certainly much better than the 1.9% drop at its struggling rival Target. Still, its profit missed the mark slight for a variety reasons including its decision to absorb the costs of tariffs on some items (though certainly far from all).
"With regards to our U.S. pricing decisions, given tariff-related cost pressures, we're doing what we said we would do," CEO Doug McMillon told investors on the company's earnings call. "We're keeping our prices as low as we can for as long as we can." Also helping is that consumers have proven quite resilient, he added. "Their behavior has been generally consistent. We aren't seeing dramatic shifts."
Rainey told CNBC that Walmart has been managing tariff hikes by accelerating imports from abroad and also offering temporary items, which the retailer calls "Rollbacks." "This is managed on an item-by-item and category-by-category basis," he told the news oulet. "There are certainly areas where we have fully absorbed the impact of higher tariff costs. There are other areas where we've had to pass some of those costs along."
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