Walmart Says Price Increases Are Coming Due to China Tariffs

18 May, 2019, 03:45 | Author: Regina Silva
  • Gutierrez center checks out a customer at a Walmart Supercenter in Houston. On Thursday Jan. 31 2019 the Labor Department releases the employment cost index for the fourth quarter a measu

Walmart imports 26 percent of its merchandise from China compared to Target, which imports 34 percent of its products from the Asian country. "Our goal is to always be the low-price leader, and we will actively manage pricing and margins as warranted with our customers and shareholders in mind".

Furniture is already effected by the tariffs, and clothing and accessories are next, should President Trump follow through on his most recent threatened levies on imported Chinese goods, Gennette said.

Last week, President Donald Trump raised tariffs on $200 billion in Chinese goods from 10 percent to 25 percent.

Walmart isn't the only major retailer to warn that increased tariffs will mean increased prices for consumers.

Walmart U.S. CEO Greg Foran said its merchants will use "appropriate mitigation strategies" for the tariff threat and will manage costs "on an item by item basis". Retail sales declined in April as US households curtailed spending on vehicles and other products.

"We're monitoring the tariff discussions and are hopeful that an agreement can be reached", Biggs said in a statement.

Is Walmart raising prices because of tariffs?

'It´s not just tariffs. That could make a number of goods, including toys, clothes and sneakers, more expensive for American consumers.

Walmart shares rose 2.0 per cent to $101.85 in early trading.

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Walmart CFO Biggs said the retailer has not seen signs of a slowdown in consumer spending.

A study by the Center for Economic Policy Research found the Trump administration's 2018's tariffs cost USA consumers $1.4 billion per month. Walmart said it will cost the company less than two-day shipping since orders will be delivered from warehouses closer to the customer and arrive in a single box rather than multiple packages.

At the end of the quarter, Walmart has 2,450 stores with grocery pickup in the US and almost 1,000 locations with delivery. Analysts estimated growth of 3.1 percent, according to IBES data from Refinitiv. Earnings, adjusted for non-recurring gains, came to $1.13 per share. That marked Walmart's fourth-straight quarter of sales growth above 3% at stores open at least a year. Revenue was up 2.5%, driven by a growing grocery sales business, the Associated Press reported.

Operating income fell 4.1 per cent to US$4.9 billion, in part because of Walmart's purchase of Indian e-commerce start-up Flipkart previous year.

In the United States, the largest piece of Walmart's business, operating income grew 5.5 per cent as some transportation costs eased.

US e-commerce business rose 37%, helped by strong sales in fashion and home goods.

Revenues climbed one per cent to $123.9 billion. The company has forecast a 35 percent increase in online sales this year.

Total revenue was up 1% at $123.9 billion but lower than analysts' estimates of $125.03 billion dragged down by currency impact and lower global sales.

On Tuesday, Walmart said it was considering a stock market listing for its British supermarket arm Asda, whose attempt to combine with rival J Sainsbury was blocked by British regulators last month.

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