Walmart to raise prices amid tariff strain
Shares of Walmart fell as much as five percent after executives said the retail giant - known for its advertising of low prices - will have to start raising them later this month due to the high cost of tariffs.
The announcement is a clear signal that U.S. President Donald Trump's trade war is filtering through to the American economy, even to a company noted for its ability to manage costs more aggressively than rivals to keep prices low.
Walmart also declined to provide a profit forecast for the second quarter, even as the company's U.S. comparable sales surpassed expectations in the first quarter.
It also posted a quarterly profit that topped estimates.
U.S. shoppers will start to see prices rise at the end of May and certainly in June, Walmart's Chief Financial Officer John David Rainey said in a CNBC interview.
On a post-earnings call with analysts, he said the retailer would also have to cut back on orders as it considers price elasticity.
As the largest importer of container goods in the United States, Walmart is heavily exposed to tariffs.
Walmart's CEO Doug McMillon said the retailer would not be able to absorb all the tariff costs because of narrow retail margins.
However, he said he was committed to ensuring that tariff-related costs on general merchandise - which primarily come from China - do not drive food prices higher.
Separately, a report from the Commerce Department said U.S. retail sales growth slowed in April.
It showed that a boost from households' front-loading car purchases ahead of tariffs was fading and that households pulled back on other spending, including on airline tickets and hotel stays due to economic uncertainty.
