Walmart execs vow it will keep delivering low prices despite tariff uncertainty

NEW YORK (AP) — Walmart executives offered a dose of confidence that the retailer will keep delivering low prices as it navigates President Donald Trump’s escalating trade wars with China and nearly all of the nation’s trading partners that have brought a wave of economic uncertainty.

But the nation’s largest retailer, which had delivered another year of strong sales and profits as its competitive prices became a strong magnet for inflation-weary shoppers, told analysts on Wednesday that it’s still vulnerable to the challenges and is monitoring the fluid tariff situation.

“While in the short term, we’re not immune to the effects, we are positioned to play offense,” Walmart’s CEO Doug McMillon said at an investor meeting. “Nothing about the current environment impacts our confidence in our business or our strategy.”

The Bentonville, Arkansas-based retailer reiterated its full-year sales and operating income outlook, and it said it continues to expect first-quarter sales growth of 3% to 4%.

But it walked away from its guidance for first-quarter operating profit growth of between 0.5% to 2%, citing the risk of tariffs. It didn’t provide a new range.

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Walmart said in a release the range of outcomes has “widened due to less favorable category mix” and “the desire to maintain flexibility to invest in price as tariffs are implemented.”

Shares rose nearly 9% in midday trading on Wednesday.

Executives told analysts on Wednesday that sales have been volatile during the company’s fiscal first quarter.

The remarks come the same day that Trump’s trade wars have escalated, raising the risk of a recession and causing panic in the financial markets. Trump’s latest round of tariffs went into full effect at midnight Wednesday, with higher import tax rates on dozens of countries and territories taking hold.

On Wednesday, China raised tariffs on American goods to 84% to match Trump’s addition of a 50% tariff, while adding an array of additional countermeasures Wednesday.

The 84% tariff will be effective Thursday, and comes as a 104% tax on the country’s exports to the U.S. came into effect. Those tariffs were abruptly pause for 90 days later on Wednesday for most countries except China, which faces a 125% tariff.

Walmart has built in hedges against some tariff threats. Two-thirds of Walmart’s merchandise is sourced in the U.S., with groceries driving much of that. Groceries account for roughly 60% of Walmart’s U.S. business.

But Walmart faces challenges with the new tariffs because they carry more economic risks than during Trump’s first term. A wave of new price increases would deal a blow to its lower- and middle-income shoppers who have already been pulling back in the last year or so because of still-high inflation on necessities.

Walmart executives said that it’s looking at the mix of products and may take a shorter profit margin on some items than it might have historically and spread that cost pressure somewhere else so that it can manage the total business.

“We like where our price gaps are, and we want to keep them, ” McMillon told investors. “If you had us choose between widening them or having them narrow, we’re not going to let them narrow. ”

McMillon added that there are so many variables playing out in terms of what costs are going to be and where people source from.

“We’re going have to manage this as we always do daily,” he said.