Walmart To Increase Prices As US-China Trade War Continues

18 Mai, 2019, 03:46 | Auteur: Auguste Feret
  • U.S. China Trade War Walmart Raising Prices Because of Tariffs

Macy's CEO Jeff Gennette has already pulled the trigger.

Walmart chief financial officer Brett Biggs told reporters on a call after the retailer reported earnings for the first quarter of 2019.

Walmart shares, which have gained 7 percent so far this year, and closed up 1.4 per cent at $101.31 on Thursday.

Consumers can expect to pay more for thousands of products, from clothing and furniture to bicycles and food, as a result of expanded tariffs on Chinese-made goods. China retaliated on Monday, though on a smaller scale. "A sudden tariff increase with less than a week's notice would severely disrupt US businesses, especially small companies that have limited resources to mitigate the impact".

It's not a Walmart-specific issue: Macy's Inc. said Wednesday that the latest tariffs, if implemented, would likely be reflected in its prices.

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".

Biggs said the retailer has not seen signs of a slowdown in consumer spending, but he declined to comment on the health of the consumer in the near term.

According to a letter sent to President Donald Trump by retail groups, China supplies 41 percent of apparel sold in the U.S.as well as 72 percent of all footwear and 84 percent of travel goods.

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 has said the costs for next-day delivery are lower versus two-day service because eligible items will come from a single fulfillment center located closest to the customer.

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Revenue for the quarter came in at $123.9 billion, compared to estimates of $124.94 billion.The closely-followed comp sales number came in at 3.4%, marking the company's best first quarter in 9 years.

Earlier this week, Walmart stepped up its battle with Amazon by offering one-day delivery in some markets without a shipping fee, weeks after Amazon announced a similar plan. Analysts estimated growth of 3.1%, according to IBES data from Refinitiv.

Comparable sales at U.S. stores - a key retail-sector benchmark closely-watched by Wall Street - jumped 3.4 per cent, marking the company's best performance in nine years, the company said.

Adjusted earnings per share increased to $1.13 per share, beating expectations of $1.02 per share.

Tariffs pose an obstacle for Walmart, one of the strongest retailers in the United States. "We have a stronger foundation in place with our stores, and we're making good progress in e-commerce".

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

Total revenue was up 1 per cent at US$123.9 billion but lower than analysts' estimates of US$125.03 billion, dragged down by the currency impact and lower global sales. The company has forecast a 35 percent increase in online sales this year. Excluding currency, revenue was up 2.5 per cent at $125.8 billion.

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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