The timing was a bit awkward.
Walmart’s investor event — which happens every two years and aims to showcase the company’s strengths and strategy for growth — also happened to fall on the same day that U.S.-imposed tariffs went into effect worldwide and a trade war heated up.
As the largest retailer in the United States, Walmart relies on suppliers from around the world. And for the Wall Street analysts who attended the event in Dallas on Wednesday, tariffs were top of mind.
Doug McMillon, Walmart’s chief executive, acknowledged the uncertainty. In response to one of several questions from analysts about tariffs, he said, “There’s so many variables playing out in terms of what costs are going to be, where people source from. We’re going have to manage this as we always do, daily.”
Or by the minute.
As the event got underway on Wednesday, the United States had imposed worldwide tariffs, including a levy of 104 percent on Chinese goods, and China quickly retaliated with 84 percent tariffs on U.S. goods. Mr. McMillon, speaking just after Beijing’s additional tariffs went into effect, said the situation was “very fluid.” In fact, not long after Mr. McMillon’s question-and-answer session with analysts, President Trump said he was pausing his worldwide reciprocal tariffs for 90 days and raising the rate on China to 125 percent.
During the session, Mr. McMillon emphasized that Walmart was well placed to cope with uncertainty, having navigated “the period after 9/11, the global financial crisis, a pandemic and more recently high inflation.” Walmart’s customer base includes a large number of lower-income shoppers, who have less capacity to absorb the higher prices that the tariffs could bring.
John David Rainey, Walmart’s chief financial officer, emphasized that two-thirds of what Walmart sells in the United States is made, grown or assembled domestically; the figure includes groceries, which generally have lower margins. The other third of what Walmart sells comes from all over the world, especially from China and Mexico, he said.
Mr. Rainey said the tariffs had made it harder for Walmart to predict its first-quarter operating income growth. “We’re one week into this new tariff environment, and we’re still working through what this means for us,” he said. “For the current quarter, the uncertainty and decline in consumer sentiment has led to a little more sales volatility week to week and, frankly, day to day.”
Walmart reiterated expectations for first-quarter sales growth of about 3 to 4 percent and said that its annual sales growth guidance remained unchanged, with customers still expected to migrate toward e-commerce and delivery, key parts of Walmart’s strategy. Walmart will report its first-quarter results on May 15.
