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Walmart lifts outlook for sales, earnings despite tariffs / Photo: © AFP/File
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Walmart lifts outlook for sales, earnings despite tariffs
Big-box retailer Walmart hiked its outlook for sales and some earnings in results released Thursday, even as costs of goods imported to the United States rose after President Donald Trump's wide-ranging tariffs this year.
Walmart is among major retailers reporting their financial results this week, with markets keeping close tabs on consumer patterns -- and signs of price increases -- as tariffs bite.
The company topped analysts' quarterly sales estimates, with revenues for the three months ending July 31 at $177.4 billion, up 4.8 percent from the same period a year ago.
But it missed earnings expectations with adjusted earnings-per-share (EPS) at 68 cents, lower than anticipated.
US companies have been squeezed in recent months as tariffs raised the costs of importing certain foreign goods, although many mitigated the blow to consumers by bulking up on inventory before Trump introduced the new levies.
The overall impact on US consumer prices appears limited for now but economists are closely monitoring the pass-through of costs to gauge if the inflation hit will be one-off or if there will be lingering effects.
In its second quarter results released Thursday, Walmart raised its outlook, anticipating net sales to rise between 3.75 percent and 4.75 percent for the fiscal year, up from earlier expectations of 3.0 percent to 4.0 percent.
It also raised its adjusted EPS outlook to a range of $2.52 to $2.62, up from $2.50 to $2.60 per share before.
Walmart shares fell more than 3.4 percent in pre-market trading.
Among segments, its global e-commerce sales rose 25 percent. Walmart noted that net sales growth internationally was boosted by segments including China, Mexico and Central America.
E-commerce sales were up 26 percent for the United States, Walmart said in its report.
Sales through store-fulfilled delivery channels grew nearly 50 percent, the company added.
It noted strong sales growth as well in grocery, alongside health and wellness.
Since returning to the presidency in January, Trump has imposed a 10-percent tariff on goods from most trading partners.
Earlier this month, the 10-percent rate rose to varying levels for dozens of economies including the EU, Japan and South Korea, even as several had struck deals to avert even steeper levies.
In May, Walmart warned of price increases due to higher tariffs, saying it might not be able to absorb all the additional pressures.
In an earnings presentation released Thursday, Walmart maintained that it had "strong inventory management," but that there were also higher costs for imported goods.
G.Allen--SFF
