Important takeaways
- Walmart's CFO stated that the prices of some items could rise due to proposed tariffs.
- Walmart and Lowe's expressed concern about the potential impact of tariffs.
- Walmart has diversified its supply chain to mitigate the effects of past tariffs.
WalmartCFO John David Rainey said the company may have to raise prices on some items if President-elect Donald Trump's proposed tariffs are implemented. Rainey's comments came as Walmart, the largest U.S. retailer, beat Wall Street's profit and sales expectations and raised its full-year forecast. Similarly, Lowe's also addressed the potential risks of the tariff proposal during its earnings report on Tuesday.
The comments from Walmart and Lowe's add to growing concerns among U.S. retail leaders about the potential impact of the tariffs. During his presidential campaign, Trump proposed imposing tariffs of 10% to 20% on all imports, with prices as high as 60% to 100% on goods from China.
Family
Walmart is heavily discounting Roku Smart Media Players and TVs ahead of Black Friday
Black Friday is about more than Fire TV devices. With these discounted media players and smart TVs, buyers can put together an entire Roku household.
Rainey noted that it is still too early to determine which specific products may see price increases as a result of the proposed tariffs. “We never want to raise prices,” he told CNBC. “Our model is everyday low prices. But there will probably be cases where prices will go up for consumers.” According to Walmart's CFO, most of its goods are not at risk of being affected by tariffs, as about two-thirds of the products the retailer sells are made, grown, or assembled in the U.S. “We've lived in a tariff environment for seven years, so we're pretty familiar with that,” he told customers, “so we want to work with suppliers and with our own brand range to try to bring prices down.”
Walmart is considering price hikes amid proposed Trump tariffs
Rainey also noted that Walmart, like many other companies, has worked to diversify its supply chain by sourcing goods from different regions rather than relying heavily on China or any single country, adding that the tariffs imposed during Trump's first term had already caused the company to make significant adjustments.
Other retailers and brands have expressed concern about the potential challenges posed by the proposed tariffs. Elf Beauty CEO Tarang Amin recently said in an interview with CNBC that the company may have to raise prices if the higher tariffs take effect. Similarly, shoe brand Steve Madden revealed plans to cut its imports from China by up to 45% over the next year in a bid to minimize the financial impact.
During an earnings call, Lowe's CFO Brandon Sink revealed that about 40% of the company's cost of goods sold comes from international sources, including direct imports and items from national brands. He acknowledged that tariffs “would certainly increase product costs,” but added, “timing and details remain uncertain at this point.”
The possibility of rising prices comes at a time when U.S. inflation has eased, after years of economic pressure on consumers. In October 2024, the consumer price index (CPI) rose 2.6% year-on-year, up slightly from 2.4% in September, marking the first annual increase in inflation in seven months. Despite the recent uptick, inflation is well below the peak of 9.1% in 2022. The Federal Reserve is expected to continue with planned rate cuts in December to keep inflation close to its 2% target.
