How Walmart’s CEO navigated tariffs to post a solid quarter: ‘We’re keeping our prices as low as we can for as long as we can’

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RegExp("[?&]notifications=1(&|#|$)");"desktop"===y&&i&&b.test(window.location.search)&&(i.checked=!0)};be("ybar-mod-notification",(function(e){var t={isUH3:"crunch"===e.getConfig().ytheme,notifContainer:document.getElementById("notification-container"),notifBadge:document.getElementById("notif-badge"),notifMenu:document.getElementById("ybarNotificationMenu"),notifMenuOpener:document.querySelector("#ybarNotificationMenu + label"),notifDropdown:document.getElementById("notifDropdownContainer"),tooltipContainer:document.querySelector(".".concat(Vn)),notifLabel:document.querySelector(".".concat($n))};t.notifDropdown&&ro(e,t)}))}()}};]]>Phil WahbaThu, Aug 21, 2025, 5:21 PM 3 min readThe good news? Walmart Inc. on Thursday reported another quarter of healthy sales growth. The bad news: Its profit fell short of Wall Street forecasts, in part because of how it is managing all the tariff uncertainty.The massive big-box chain said that comparable U.S. sales in the quarter ended July 31 rose 4.6%, more than analysts expected and certainly much better than the 1.9% drop at its struggling rival Target. Still, its profit missed the mark slightly for a variety of reasons, including its decision to absorb the costs of tariffs on some items (though certainly far from all).“With regards to our U.S. pricing decisions, given tariff-related cost pressures, we’re doing what we said we would do,” CEO Doug McMillon told investors on the company’s earnings call. “We’re keeping our prices as low as we can for as long as we can.” Also helping is that consumers have proved quite resilient, he added. “Their behavior has been generally consistent. We aren’t seeing dramatic shifts.”To be sure, the impact of higher tariffs is just beginning to kick in at Walmart and other retailers. It’s still early, and tariff hikes are more likely to be felt later in 2025 as Walmart replenishes inventory. Walmart’s finance chief, John David Rainey, told investors that, in all, prices rose 1% in the U.S. during the quarter, and the retailer decided to take the hit to its margins on some goods, but pass them to consumers in the form of higher prices on others.Rainey told CNBC that Walmart has been managing tariff hikes by accelerating imports from abroad and also offering temporary items, which the retailer calls “Rollbacks.” “This is managed on an item-by-item and category-by-category basis,” he told the news outlet. “There are certainly areas where we have fully absorbed the impact of higher tariff costs. There are other areas where we’ve had to pass some of those costs along.”Indeed, Walmart is doing what McMillon said it would. In April, at its annual investor day in Dallas, the CEO said Walmart’s buyers know how to navigate periods of cost increases. “Some of the confidence that we’ve been expressing is really founded on: We know who these buyers are,” said McMillon at the time. “They have great tools to manage this long-standing supplier relationship, and we believe that they will execute well.” It helps that Walmart has enormous clout with vendors, which rely on the retailer for a big portion of their sales, and can persuade them to shoulder some of the burden.That ability to shield customers and keep prices low are key reasons Walmart has been a top-performing retailer since President Trump announced higher tariffs on many trading partners this spring. 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