Walmart

The LGPA Tour has cancelled the Walmart NW Arkansas Championship after 18 holes due to bad weather.

Dangerous conditions at the Pinnacle Country Club in Rogers, Arkansas, saw play suspended on Saturday with full cancellation of the event confirmed on Sunday.

“The course received 3.25 [inches] of rain last night and after having assessed the golf course and consulted with our meteorologist and superintendent, the golf course is unplayable,” the LPGA said in a statement.

“Based on the weather forecast for the remainder of today and all day Monday and Tuesday, it is highly unlikely that 36 holes could be completed to make it an official event.

“As a result, the decision has been made to cancel the remainder of the tournament, with only players’ 18-hole score counting.”

The scheduled 54-hole event will be unofficial with no points awarded in the Race to CME globe, the season-long points competition.

Consumer staples retail may seem like an unexciting business. Still, certain superior retail business models have gone on to generate massive market returns. Such was the case with Walmart (WMT -1.20%), which went on to become a 100-bagger stock over a 40-year period between 1972 and 2012.

These stocks look inevitable in retrospect, but who would have thought that a low-margin general store started in rural Arkansas would go on to become the international juggernaut Walmart is today?

For young investors looking for the next big thing in an unassuming package, this convenience store company bears striking similarities to Walmart at this stage.

Casey’s General Stores: small towns, blockbuster returns

Casey’s General Stores (CASY 0.65%) was founded in 1959 in Ankeny, Iowa, and went public in 1983. Despite operating across the Midwest for 65 years, Casey’s has still expanded only within the middle of the country, from North Dakota and Texas in the West to Ohio and Florida in the East, counting 2,895 total stores as of the end of July.

That may sound like a lot, but Casey’s are typically scattered about small towns, with two-thirds of their stores in towns with fewer than 20,000 residents.

Despite its small-town flavor, Casey’s has had a remarkable run as a public company. Since the beginning of 1990, Casey’s stock has appreciated 289 times over, including dividends, compared with just a 37 times total return for the S&P 500 Index. That’s nearly 8 times relative outperformance!

CASY Total Return Level data by YCharts.

How did this small-town convenience store, which doesn’t exactly display tech-like growth, generate such returns?

Casey’s winning business model

Casey’s didn’t invent the gas station, the convenience store, or the quick-service food market. However, it appears Casey’s has figured out how to do all three well in one convenient locality — and to do it efficiently.

The big differentiator is fresh food — specifically, pizza. It may come as a surprise to some, especially those living on the coasts, that Casey’s is the fifth-largest pizza chain in the United States. Casey’s began offering fresh pizza in 1984, then took those learnings to expand its fresh food offerings. Casey’s now offers prepared food for all dayparts, along with groceries and other general merchandise, including even Casey’s own private label brands.

Those sales are much higher-margin than gasoline, making Casey’s a highly profitable business compared with peers. “Inside the store” sales accounted for 27% of total revenues and 63% of total gross profits, respectively, during the last quarter.

Convenience store operators aren’t typically experts in fresh food, but Casey’s ability to sell fresh food well gives it a lot of advantages. It can offer gasoline at highly competitive prices due to higher-margin inside sales, while lower gasoline prices increase traffic.

Casey’s has also vertically integrated its operations, owning all three of its major distribution centers and 60% of its fuel delivery tankers, which streamlines costs. Casey’s then invests those savings in leading technology, rewards, and data, which further increase frequency.

While not revolutionary, Casey’s found an advantage in delivering fresh food in a convenience store format, then maximized productivity by doubling down on the advantages that model brings. That has resulted in 6.7% operating margins over the past 12 months — pretty good for convenience retail that sells low-margin gasoline — and a 17.1% return on equity, which is also impressive for a store that sells a lot of low-margin gas.

Image source: Getty Images.

Is it too late to buy, though?

Some might look at Casey’s returns and think they’ve missed the boat. And it’s true that a 290 times return probably isn’t in the cards for those who buy now.

However, you can still earn above-average returns on a stock that has already gone up a lot. In 1994, investing legend Peter Lynch noted that investors could have waited until 10 years after Walmart’s initial public offering (IPO) to buy the stock and still made 35 times one’s money. While it wasn’t the 500 times returns you got when buying at the IPO, that’s still a really great return — and, of course, Walmart has continued to appreciate a lot since 1994.

Meanwhile, it does appear that Casey’s still has a strong runway to grow, even in the Midwest. In its recent investor presentation, management noted that within 500 miles of Casey’s three existing distribution centers, 75% of towns with between 500 and 20,000 residents don’t yet have a Casey’s General Store.

The overall convenience store industry also remains fairly fragmented, with the 10 largest convenience store brands making up 63% of the industry and the remaining 37% dispersed over 500 other owners. That means scaled leaders like Casey’s can pick up market share by buying smaller stores in proven locations and converting them, which Casey’s has been doing.

Time is the friend of the wonderful business

Casey’s stock certainly isn’t cheap, trading at 36 times earnings. However, Warren Buffett once said, “Time is the friend of the wonderful company, the enemy of the mediocre.” For those with a long-term perspective, one can do worse than picking up Casey’s shares today. At a market cap of just over $20 billion, Casey’s still has the potential to grow many times over.

Walmart will soon expand its streaming offerings to its subscription members, with the retail giant announcing a new partnership with NBCUniversal’s Peacock on Monday.

Starting Sept. 15, Walmart+ subscribers can choose to receive ad-supported versions of Peacock Premium or Paramount+ as part of their membership. Every 90 days, Walmart+ members can switch between the two services.

“The additional option of Peacock Premium adds even more value and more choice to our membership, without raising the price,” said Deepak Maini, senior vice president of Walmart+, in a statement. “This is just one of the many ways we’re evolving Walmart+ to meet the needs and wants of today’s consumer.”

The move could appeal to consumers who feel overwhelmed by the different streaming choices and give them a chance to sample what each platform offers without dealing with additional cost.

Walmart+, which charges $98 for an annual plan, includes free shipping, free same-day delivery on groceries and prescriptions, gas discounts and other benefits. Adding more streaming content could help Bentonville, Ark.-based Walmart compete with Amazon Prime, though Walmart does not invest in original content, unlike the Seattle e-commerce behemoth.

Walmart declined to say how many people subscribe to Walmart+.

In 2020, Walmart launched Walmart+, which competes with Amazon’s $139 annual Prime membership. Prime offers perks such as free shipping and streaming series such as “The Summer I Turned Pretty” and “Reacher,” action movie “The Pickup” and NFL football games.

Last week, Amazon announced that Peacock Premium Plus, the streaming service’s ad-free version, would be available on Prime Video for an additional fee, along with 100 other subscription options in the U.S. Amazon also said it had a multiyear deal for the Peacock app to be available on its Fire TV in the U.S.

Walmart has had a spotty track record on its own streaming efforts and currently does not have its own streaming service or produce its own originals. In 2010, Walmart purchased video-on-demand service Vudu and in 2018 partnered with MGM to create original programming for the platform. The retailer later sold Vudu to Fandango in 2020.

Before that, Walmart launched a web store to sell movie and TV show downloads but shut it down in less than a year after its partner, Hewlett-Packard Co., discontinued the technology for the site after it underperformed.

Walmart (WMT 0.88%), the world’s largest retailer, isn’t usually considered a high-growth stock. But over the past five years, its stock has more than doubled as the S&P 500 rose about 80%. It achieved those market-beating gains even as the pandemic, inflation, geopolitical conflicts, tariffs, and other macro headwinds rattled the global economy.

But can it stay ahead of the market over the next five years? Let’s review its core strengths, upcoming catalysts, and valuations to see how much higher its stock could go.

Image source: Walmart.

What happened to Walmart over the past five years?

Walmart operates more than 10,750 stores and warehouse clubs across 19 countries. It generates most of its revenue from its namesake U.S. stores, while its Sam’s Club stores compete against Costco in the warehouse club market. It also operates a broad range of e-commerce websites and smaller regional banners.

Walmart’s scale and diversification helped it keep pace with Amazon (AMZN -1.16%) as other brick-and-mortar retailers crumbled. It expanded its e-commerce marketplace, renovated its stores, matched Amazon’s prices, upgraded its shipping and curbside pickup options, and leveraged its massive network of brick-and-mortar stores to fulfill its online orders. It also rolled out more private-label brands to lock in its shoppers and boost its gross margins.

From fiscal 2021 to fiscal 2025 (which ended this January), Walmart’s total revenue grew at a compound annual growth rate (CAGR) of 5%. Its comparable sales in the U.S. grew at a healthy rate, even as many of its retail peers struggled with macro and competitive challenges.

Data source: Walmart. Comps growth excludes fuel sales.

During the pandemic, Walmart’s sales surged as more shoppers stocked up on essential goods. Its e-commerce investments also paid off as more of those customers shopped online. When inflation surged from 2021 to 2023, it drew more cost-conscious shoppers to its stores. Its international growth stalled out in fiscal 2022 after it divested some of its weaker overseas stores, but the segment stabilized in fiscal 2023 and grew over the following two years.

In fiscal 2021, Walmart’s reported earnings per share (EPS) declined as its pandemic-related expenses surged, it divested some of its international businesses, and it generated a higher mix of its revenue from its lower-margin e-commerce marketplace.

In fiscal 2023, its EPS dropped again as inflation, markdowns for flushing out excess inventories, currency headwinds, and a one-time litigation charge from an opioid settlement compressed its margins. However, Walmart’s profits surged again in fiscal 2024 and fiscal 2025 as those headwinds dissipated.

What will happen to Walmart over the next five years?

For fiscal 2026, Walmart expects its total net sales to rise 3.75% to 4.75% as its adjusted EPS increases 0.4% to 4.4%. It expects its top-line growth to be driven by its rising e-commerce sales, its streamlined pricing and inventory management strategies, and the expansion of its integrated advertising business, which will be strengthened by its recent takeover of Vizio.

On the bottom line, it expects higher tariffs — especially on Chinese goods — to squeeze its margins. It might offset some of that pressure by negotiating new deals with its Chinese suppliers, storing more of their products in its domestic warehouses, or passing those costs onto its consumers, but those strategies aren’t long-term solutions. However, the cost savings from its AI and automation efforts (especially in its warehouses) might cushion that blow.

From fiscal 2025 to fiscal 2028, analysts expect Walmart’s net sales and reported EPS to grow at a CAGR of 5% and 10%, respectively. That growth should be driven by its tech-forward “Store of the Future” upgrades, the expansion of its advertising arm, the automation of its warehouses, and AI-driven upgrades for its e-commerce marketplaces.

We should take those estimates with a grain of salt, but they seem like a realistic continuation of Walmart’s current growth strategies. But a lot of optimism is already baked into its stock at 35 times next year’s earnings, and that higher valuation might set it up for a steep drop on any negative news.

Assuming Walmart matches Wall Street’s estimates, grows its EPS at a CAGR of 10% over the following three years, and trades at a more reasonable 30 times earnings, its stock price could rise another 33% to about $121 by 2030. That would be a solid five-year gain, but Walmart’s premium multiple might prevent it from replicating its previous gains or consistently staying ahead of the S&P 500, which has generated an average annual return of more than 10% since its inception in 1957.

Walmart’s second-quarter results are showing that United States consumers across the spectrum are still flocking to the retailer’s stores despite economic headwinds, but its shares have dipped as the company’s margins ebbed and inventory costs rose.

The world’s largest retailer has scooped up market share from rivals as wealthier consumers frequent the store more often, worried about the effects of tariffs on prices, the company’s results on Thursday showed.

That has fueled an 85 percent surge in the stock over the last year-and-a-half that some analysts say has made its valuation too lofty.

Shares were down 4 percent in midday trading in New York, as its second-quarter profit was lower than expected, registering Walmart’s first earnings miss in more than three years.

Investors also focused on Walmart’s gross margins for the quarter, which fell short of their expectations, even though the company raised its fiscal year sales and profit forecasts.

Overall gross margins were about flat at 24.5 percent versus 24.4 percent last quarter, missing consensus estimates of 24.9 percent, according to brokerage DA Davidson.

“Expectations were high for a margin beat and we didn’t get that, so we’re getting a little bit of a pullback on the stock,” said Steven Shemesh, RBC Capital Markets analyst.

Still, the Bentonville, Arkansas-based chain’s results showed it has continued to benefit from growing price sensitivity among Americans, earning revenue of $177.4bn in the second quarter. Analysts on average were expecting $176.16bn, according to LSEG data. Adjusted earnings per share of 68 cents in the second quarter fell short of analyst expectations of 74 cents.

Consumer sentiment has weakened due to fears of tariffs fueling higher inflation, hitting the bottom lines of some retail chains, but Walmart’s sales have remained resilient. Companies have been able to withstand paying those import levies through front-running of inventories, but as those products are sold, the next shipments are pricier, Walmart CEO Doug McMillon said.

“As we replenish inventory at post-tariff price levels, we’ve continued to see our cost increase each week,” he said on a call with analysts, noting those costs will continue rising in the second half of the year. The effects of tariffs have so been gradual enough for consumer habits to change only modestly.

Walmart had warned it would increase prices this summer to offset tariff-related costs on certain goods imported to the US, a move that drew criticism from President Donald Trump. Consumer-level inflation is increasing modestly, while wholesale inflation spiked in July to its fastest rate in more than three years.

According to an S&P Global survey released on Thursday, input prices paid by businesses hit a three-month high in July, with companies citing tariffs as the key driver. Prices charged by businesses for goods and services hit a three-year high, as companies passed along costs to consumers. A day earlier, rival Target warned of tariff-induced cost pressures.

Walmart got a boost from a sharper online strategy as more customers relied on home deliveries. Its global e-commerce sales jumped 25 percent during the second quarter, and Walmart said one-third of deliveries from stores took three hours or less.

Shoppers adjust to higher prices

McMillon expects current shopping habits to persist through the third and fourth quarters. He noted middle- and lower-income households are making noticeable adjustments in response to rising prices, either by reducing the number of items in their baskets or by opting for private-label brands. This shift has not been seen among higher-income households, which Walmart defines as those earning over $100,000 annually.

Walmart expects annual sales to grow in the range of 3.75 percent to 4.75 percent, compared to its prior forecast of a 3 percent to 4 percent increase. Adjusted earnings per share are expected in the range of $2.52 to $2.62, compared to its previous range of $2.50 to $2.60.

Chief Financial Officer John David Rainey said the company is looking at more possible financial outcomes than before because of trade policy talks, uncertain demand, and the need to stay flexible for future growth. Based on what it saw in the second quarter, Walmart expects the impact on margins and earnings from the higher cost of goods to be smaller in the current quarter than it previously thought, Rainey said.

“Broad consumer and macro trends remain favourable to Walmart, especially in the shape of consumers wanting to maximise bang for their buck,” said Neil Saunders, managing director of retail consultancy GlobalData.

Walmart’s total US comparable sales rose 4.6 percent, beating analysts’ estimates of a 3.8 percent increase. The company noted strong customer response to over 7,400 “rollbacks,” its term for discounted prices, with 30 percent more rollbacks on grocery items.

Average spending at the till rose 3.1 percent from an increase of 0.6 percent last year, but growth in customer visits fell to 1.5 percent from 3.6 percent in the year-earlier period. Walmart logged 40 percent growth in marketplace sales, including electronics, automotive, toys, and media and gaming.

Two-thirds of what Walmart sells in the US is domestically sourced, executives had said last quarter, which gave it some insulation from tariffs compared to competitors.

A former Walmart employee who tried to intervene as Border Patrol agents arrested an undocumented custodial worker in Pico Rivera in June was indicted by a federal grand jury Wednesday.

Adrian Martinez, 20, was indicted by a Santa Ana jury on the charge of conspiracy to impede a federal officer tied to the events of June 17, which unfolded at the height of the Trump administration’s immigration raids in the Los Angeles area. Martinez’s violent arrest was caught on video and quickly went viral.

According to the three-page indictment, Martinez confronted Border Patrol agents as they tried to arrest the custodial worker in the parking lot of a shopping center and blocked the agents’ vehicle with his own. Prosecutors allege that he positioned himself with a growing crowd to surround the agents’ vehicle and prevent it from leaving the area.

Martinez then allegedly grabbed a large trash can and moved it in front of the agents’ vehicle, blocking them from being able to pass.

According to the U.S. attorney’s office in L.A., Martinez faces up to six years in prison if convicted. He is set to be arraigned in downtown L.A. on Thursday.

“Make no mistake: There are serious, life-altering consequences for impeding law enforcement,” acting U.S. Atty. Bill Essayli said in a news release Wednesday.

Martinez’s lawyers released a statement noting that “just as in other cases arising out of recent illegal and inhumane ICE raids, the U.S. Attorney’s Office had to travel out of Los Angeles county to secure this indictment.”

The Times previously reported on Essayli’s struggles to secure indictments in protest cases.

“Although we are disappointed that Adrian’s case has not been dismissed, we always anticipated being required to litigate this case post-indictment,” the Miller Law Group, which represents Martinez, said in its statement.

The lawyers also criticized Essayli for posting on X, “before we had even officially been notified of the outcome of the indictment” and using it “to maliciously spread falsehoods and fearmonger at our client’s expense.”

In a June interview with the Times, Martinez said he was on break when he spotted the custodial worker, “getting grabbed very aggressively, getting manhandled,” by the agents. Martinez said he drove over, told the agents that their actions weren’t right and they should leave the worker alone.

Surveillance and spectator video captured at the scene and looped in social media feeds show an agent rushing Martinez and shoving him to the ground. Martinez gets back up, there is more shoving, and he exchanges angry words with a masked officer carrying a rifle. Then other agents swarmed him, pushed him back down and dragged him to their truck.

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Agents ultimately arrested both the custodial worker and Martinez.

In the June interview with the Times, Martinez said after his arrest he was taken to a parking structure, where he was told he’d been arrested for assaulting a federal officer by striking an agent in the face and breaking his glasses. Martinez, who weighs around 150 pounds, said the agents arresting him pointed to the colleague he was being accused of attacking, who looked “like a grizzly bear.”

“I don’t even remember you,” Martinez recalled saying. “It just seemed like they were trying to get me to say like, ‘yes, you assaulted him,’ but I knew I didn’t.”

The next day, Essayli posted a photo on X of Martinez, still in his blue Walmart vest. Martinez, he wrote, had been arrested “for an allegation of punching a border patrol agent in the face.”

Martinez was charged in a June 19 criminal complaint with conspiracy to impede a federal officer. The complaint makes no reference to a punch and neither does Wednesday’s indictment.

Bloomberg Law previously reported that Essayli had rejected office supervisors’ advice not to charge Martinez for assaulting a federal officer and that an an FBI agent felt there was insufficient evidence and declined to sign a complaint attesting probable cause to a judge.

Within a day, the outlet reported, another agent signed off on the charge of conspiracy to impede.

In an interview a week after his arrest, Martinez wore a brace on his right leg, where he’d suffered a contusion, and said he’d been bruised and scratched all over his body.

Walmart later terminated Martinez, citing “gross misconduct,” according to a separation notice reviewed by the Times.

“I was just speaking up for a man,” Martinez said. “How can I go from that to this?”

“People have the right to speak up for themselves and for someone else,” he added. “You don’t have to get treated like this, thrown on the floor and manhandled because of that.”

July 26 (UPI) — A lone attacker has been arrested after allegedly randomly stabbing 11 victims late Saturday afternoon at a Walmart in Traverse City, Mich.

None of the 11 stabbing victims has died, but three are undergoing surgery following the attack that occurred around 5 p.m. EDT, the Traverse City Record-Eagle reported.

The lone suspect used a folding knife in what appeared to be a random attack, Grand Traverse County Sheriff Mike Shea told the Record-Eagle.

The suspect “appears” to be a Michigan resident, Shea said during a press conference.

A group of bystanders, including at least one armed with a pistol, confronted the suspect and forced him to drop the knife while awaiting a police response, video footage posted by WZZM shows.

Michigan State Police crime lab investigators are helping to gather and analyze evidence at the crime scene, which is located in the Grand Traverse Crossing mall in the southwestern portion of Traverse City.

The stabbing victims were taken to Munson Medical Center in Traverse City, where five are in serious condition and six are in critical condition.

“We are working closely with local authorities and emergency services to ensure the best possible care for those impacted,” hospital staff said.

Traverse City is a popular vacation destination at the southern end of Lake Michigan’s Grand Traverse Bay in northern lower Michigan.

Former Transportation Secretary Pete Buttigieg, a potential 2026 presidential candidate for the Democratic Party, and his husband, Chasten Buttigieg, moved to Traverse City in 2022.

The city had a year-round population of 15,707 in 2023, but the population there and in nearby communities swells greatly during the summer months.

It’s known for beautiful sandy beaches, great freshwater fishing and hosting an annual National Cherry Festival that runs from the end of June through the Independence Day holiday.

Traverse City is located 150 miles north of Grand Rapids and 255 miles northwest of Detroit.

May 27 (UPI) — Retailer Walmart will pay a $16,000 fine for shipping realistic toy guns to New York buyers in violation of state law, state Attorney General Letitia James announced on Tuesday.

New York law bans retailers from selling or shipping toy guns that are black, dark blue, silver or aluminum-colored and resemble real firearms.

“Realistic-looking toy guns can put communities in serious danger,” James said in a news release. “That is why they are banned.”

She said realistic-looking toy guns can be used to engage in unlawful activity and have led to several deaths and shootings across the state and Walmart’s third-party sellers sold them to New York buyers.

“Walmart failed to prevent its third-party sellers from selling realistic-looking toy guns to New York addresses, violating our laws and putting people at risk,” James said.

“The ban on realistic-looking toy guns is meant to keep New Yorkers safe,” she added. “My office will not hesitate to hold any business that violates that law accountable.”

A state investigation showed third-party retailers used Walmart’s online store to sell non-compliant toy guns that they shipped to New York addresses via Walmart’s fulfillment services.

Investigators bought a realistic-looking toy gun that violated New York’s general business law’s ban on such toys and had it shipped to an address within the state.

The violations netted a $16,000 fine that Walmart paid to settle the matter.

A Walmart official said the retailer does its best to comply with respective state and federal laws and ensure third-party retailers do, too.

“We are committed to complying with all laws, and we have processes in place to ensure products offered for sale by third-party sellers on our marketplace comply with all applicable laws as well,” Walmart global communications senior manager Kelly Hellbusch told UPI in an emailed statement.

James said New York consumers can report non-compliant toy guns by reporting them in an online complaint.

May 22 (UPI) — Walmart has announced plans to lay off 1,500 corporate employees, part of what it calls a restructuring as it weighs plans to raise prices amid Trump administration tariffs.

“We are reshaping some teams in our Global Tech and Walmart U.S. organizations where we have identified opportunities to remove layers and complexity, speed up decision-making, and help associates innovate rapidly,” a memo to employees obtained by The Hill Wednesday said.

The memo said the retail giant is eliminating some jobs and creating new ones aimed at building on business priorities and growth strategy.

While Walmart said the corporate restructure is not directly related to the looming tariffs, it has said it is weighing the options of price increases and trying to absorb the tariffs when they are imposed, as it has done with past levies.

During a corporate earnings call last week, Walmart CEO Doug McMillion said the giant retailer would not be able to absorb all of the tariffs and said it would likely have to pass some costs on to consumers. Walmart said Wednesday it would be raising some prices.

Economists use Walmart as a gauge to consumer spending and have said that given the large percentage of goods the retailer imports, absorbing all of the tariffs would be difficult.

Earlier this week, President Donald Trump posted Walmart should “eat the tariffs” on social media.

“Walmart should stop trying to blame the tariffs as the reason for raising prices throughout the chain,” Trump wrote. ” Walmart made billions of dollars last year, far more than expected.”

Walmart CFO John David Rainey countered Thursday that the company is facing unprecedented financial pressure due to the tariffs.

“We have not seen prices increase at this magnitude, in the speed which they’re coming at us before, and so it makes for a challenging environment,” he told CNBC.

May 17 (UPI) — A recent Walmart earnings report citing tariffs aa a potential reason for raising prices promoted President Donald Trump to tell the world’s largest retailer to “eat the tariffs.”

“Walmart should stop trying to blame tariffs as the reason for rising prices throughout the chain,” Trump said Saturday morning in a Truth Social post.

“Walmart made billions of dollars last year,” Trump said, adding that its earnings were “far more than expected.”

“Between Walmart and China, they should, as is said, ‘eat the tariffs,’ and not charge valued customers anything,” he said.

The president said he will be “watching, and so will your customers!!!”

Narrow retail margins that are less than those of other business sectors might make it impossible for Walmart to simply eat the cost of tariffs.

“We have always worked to keep our prices as low as possible, and we won’t stop,” Walmart said in a statement to CNBC. “We’ll keep prices as low as we can for as long as we can given the reality of small retail margins.”

Trump made his social media comment two days after Walmart President and Chief Executive Officer Doug McMillon told investors Trump’s tariff policies might require the retailer to raise prices on affected goods.

“We will do our best to keep our prices as low as possible, but given the magnitude of tariffs, even at the reduced levels announced this week, we aren’t able to absorb all the pressure,” Doug McMillon, Walmart president and chief executive officer, said during an earnings call on Thursday.

Walmart’s latest guidance and forward-looking statements affirm tariffs are among factors that could significantly impact its earnings throughout the rest of the year and possibly beyond.

“The company’s results may be materially affected by many factors, such as fluctuations in foreign currency exchange rates, changes in global economic and geopolitical conditions, tariff and trade policies, customer demand and spending, inflation, interest rates, world events and various other factors,” Walmart’s earnings report says.

Rapidly changing costs are making it difficult for the retailer gauge the near-future of Walmart Chief Financial Officer John Rainey told CNBC on Thursday.

“We have not seen price increases at this magnitude in the speed in which they’re coming at us before,” Rainey said. “It makes for a challenging environment.”

The electronics and toys that Walmart sells mostly come from China, which so far is subject to a 30% tariff.

The retailer also sells goods from Central and South America, such as bananas, coffee and avocados, which also are subject to at least a 10% tariff.

Rainey told CNBC the retailer wants to keep its prices below its competitors’ prices for similar goods, which would require absorbing cost increases due to tariffs.

Walmart, the world’s largest retailer, will have to start raising prices later this month due to the high cost of tariffs, executives have warned in a clear signal that United States President Donald Trump’s trade war is filtering through to the US economy.

As a bellwether of US consumer health, Walmart’s explicit statement on Thursday is also a signpost for how the trade war is affecting companies as Walmart is noted for its ability to manage costs more aggressively than other companies to keep prices low.

Walmart’s shares fell 2.3 percent in morning trading after it also declined to provide a profit forecast for the second quarter, even as the company’s US comparable sales surpassed expectations in the first quarter.

Net sales rose 2.5 percent to $165.6bn, a hair shy of estimates, while same-store sales were up 4.5 percent. Walmart’s quarterly adjusted profit was 61 cents per share, ahead of the analyst consensus for 58 cents per share.

Many US companies have either slashed or pulled their full-year expectations in the wake of the trade war, as consumers stretch their budgets to buy everything from groceries to essentials at cheaper prices. But Walmart’s statement will resonate nationwide, as roughly 255 million people shop in its stores and online weekly around the world, and 90 percent of the US population lives within 10 miles of a Walmart.

US 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 US, Walmart is heavily exposed to tariffs, and even though the US and China reached a truce that lowered levies for imports on Chinese goods to 30 percent, that’s still a high cost to bear, executives said.

“We’re very pleased and appreciative of the progress that has been made by the administration to bring tariffs down … but let me emphasise we still think that’s too high,” Rainey said on the call, referring to the tariff cuts negotiated over the weekend.

“There are certain items, certain categories of merchandise that we’re dependent upon to import from other countries and the prices of those things are likely going to go up, and that’s not good for consumers,” he added.

Other retailers also said they would be boosting prices. German sandal maker Birkenstock on Thursday said it plans to raise prices globally to fully offset the impact of the US tariff of 10 percent on European Union-made goods.

US consumer sentiment ebbed for a fourth straight month in April, signaling watchful purchasing, while the country’s gross domestic product (GDP) contracted for the first time in three years during the first quarter, fanning worries of a recession.

Narrow margins

Walmart’s CEO Doug McMillon said the retailer would not be able to absorb all the tariffs’ costs because of narrow retail margins, but was committed to ensuring that tariff-related costs on general merchandise – which primarily come from China – do not drive food prices higher.

To mitigate the impact, Walmart is working with suppliers to substitute tariff-affected components, such as replacing aluminium with fibreglass, which is not subject to tariffs.

Despite these efforts, McMillon noted that adjusting costs is more challenging in cases where Walmart imports food items like bananas, avocados, coffee, and roses from countries such as Costa Rica, Peru, and Colombia.

Analysts said Walmart was better positioned than rivals, as its scale enables it to lean on its suppliers and squeeze out efficiencies to shield customers from tariffs, but only so much.

“There will likely be some demand destruction from tariffs; a complete wreck is unlikely,” said Brian Jacobsen, chief economist at Annex Wealth Management.

Walmart on Thursday kept its annual sales and profit forecast intact for fiscal 2026, but withheld second-quarter operating income growth and earnings per share forecasts, citing a “fluid operating environment … [which] makes the very near term exceedingly difficult to forecast at the level and speed at which tariffs could go up”.