Walmart CEO Says Shoppers Will See Higher Prices Soon: Report

Walmart reported solid quarterly results on Thursday, but noted that it would soon have to start raising prices. The retailer is the biggest in the U.S. with over 4,600 locations.

Walmart CEO Doug McMillon said on a Thursday earnings call that Walmart wasn’t able to “absorb” higher costs “given the reality of narrow retail margins.”

“Even at the reduced levels, the higher tariffs will result in higher prices,” McMillon said on the call.

In response, Walmart’s Chief Financial Officer John David Rainey told CNBC in an interview Thursday that tariffs were “still too high” for the company to absorb the cost. Rainey cautioned that Walmart shoppers could begin seeing higher prices on some goods towards the end of the month, and higher prices on a broader scale starting next month.

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“We’re wired for everyday low prices, but the magnitude of these increases is more than any retailer can absorb,” Rainey told CNBC. “So I’m concerned that the consumer is going to start seeing higher prices. You’ll begin to see that, likely towards the tail end of this month, and then certainly more in June.”

Earlier this week, the U.S. agreed this week to lower its maximum tariff rate on China from 145% to 30% for the next 90 days. China is reducing its 125% tariff on American products to 10% for the same time period. Meanwhile, the U.S. has levied a 10% universal tariff on nearly all imports.

Walmart executives stated at an investor event in April that two-thirds of the retailer’s goods in the U.S., including groceries, were made, grown, or manufactured domestically. The remaining third of Walmart’s products come from other countries, especially China and Mexico.

Rainey told CNBC on Thursday that Walmart is still collaborating with vendors to keep prices low. He added that Walmart has not yet canceled any orders from suppliers, but has downsized some in response to trade policies.

^{Walmart CEO Doug McMillon. Photo by Ethan Miller/Getty Images}

Walmart isn’t the only major retailer to recently warn customers about price hikes. Target CEO Brian Cornell told shoppers in March that food prices could increase, especially on produce from Mexico. Costco CEO Ron Vachris said last month that the retailer was working to minimize the impact of tariffs on customers and that one-third of its sales in the U.S. are imported from other countries.

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Walmart released its first-quarter earnings on Thursday, reporting that U.S. store sales rose 3.2% year-over-year to reach $112.2 billion. Walmart’s overall global revenue hit $165.6 billion in its first quarter, up 2.5% from the same time last year. The retail giant reported that health and wellness products and grocery items drove its sales strength.

The company’s U.S. e-commerce business notably grew 21% compared to the same time last year and achieved profitability for the first time.

Walmart made $681 billion in 2024, making it the largest retailer in the world based on revenue. It expects to grow revenue by 3% to 4% this year.