Walmart said on Thursday that costs for shoppers would go up due to high tariffs on imports from China, as the world’s largest retailer reported its best comparable sales growth for the first quarter in nine decades.
Walmart shares, which have gained 7 percent up to now this season, climbed 2.4 percent to $102.30 in premarket trade.
“We’re going to continue to do everything we can to keep prices low. That’s who we are. However, increased tariffs will lead to increased prices, we believe, for our customers.” Walmart primary financial officer Brett Biggs told reporters on a call after the retailer reported earnings for its first quarter of 2019.
President Donald Trump increased tariffs on $200 billion worth of Chinese imports to 25 percent from 10 percent a week. The move is widely expected to increase prices on thousands of goods, including clothes, furniture, and electronic equipment. China retaliated on Monday, announcing it would raise tariffs on $60 billion of American-made imports.
“If the potential fourth tranche of tariffs is placed on all Chinese imports, that will have an impact on both our private and our national brands,” CEO Jeff Bennett informed analysts on an earnings call. He explained it could be hard to get Macy’s to”find a path” to avoid increasing prices on consumers.
Investors and analysts anticipate spending to slow this season from a backdrop of rising debt, tariffs, and financial uncertainty.
Retail sales unexpectedly fell in April as households cut back on purchases of automobiles and a range of different goods, representing a slowdown in economic growth following a temporary increase from inventories and exports in the first quarter.