Walmart, known as one of America’s most affordable retail chains, just signaled that President Trump’s tariffs are about to disrupt its competitive pricing. Here’s what to know:
What did Walmart announce?
On an earnings call Thursday discussing the company’s newly released Q1 FY2026 financial results, CEO Doug McMillon spoke about price changes that he says will hit in the coming weeks, as the impact of tariffs builds.
“We will do our best to keep our prices as low as possible,” he said on the call. “But given the magnitude of the tariffs, even at the reduced levels announced this week, we aren’t able to absorb all the pressure given the reality of narrow retail margins.”
Which items sold at Walmart will be the most impacted?
McMillon said that tariff-related pressure has been building over the last two months, noting that, so far, toys and electronics have been most impacted.
Many companies whose products are sold at Walmart have already raised prices to absorb the impact of tariffs, or signaled that they will soon, such as toy brand Mattel. Last week, the brand said it would raise prices and move production from China to countries with lower tariffs.
But on Thursday, McMillon acknowledged that pressure has been building on food prices, too.
“We want to keep our food and consumables prices as low as we can,” he added, noting that many Americans have felt financially strained when it comes to buying groceries in recent years.
He also noted that the retailer may feel more tariff-related-pressure on some food items more than others, such as bananas, avocados, coffee, and more, coming out of countries like Costa Rica, Peru, and Colombia.
“We’ll do our best to control what we can control in order to keep food prices as low as possible,” he said. “An example would be controlling the amount of fresh food waste.”
What did Walmart’s earnings report say?
Walmart’s Q1 report showed the company’s revenue was up 2.5%, which slightly missed Wall Street’s projections. Walmart said in Thursday’s press release that it expects second-quarter net sales to increase by 3.5% to 4.5% in constant currency.
Walmart stock (NYSE: WMT) was down more than 3% in early trading on Thursday.
Will other retailers raise prices, too?
Given that Walmart is a giant brand that offers so many products, experts say the company is better equipped than most to absorb some tariff-related pressure. But if the chain is being forced to raise prices, that’s a very bad sign for consumers.
“If Walmart’s coming out—with its scale and its buying power and its focus—and saying prices are going to rise, everyone else is going to have to follow suit,” said Neil Saunders, managing director at retail consultancy GlobalData, per NBC. “Walmart is firing the starting gun on a period of price increases.”