NEW YORK — Walmart warned on Thursday that higher tariffs on imports from China will mean higher prices.
The comments came after the nation's largest retailer reported its best sale performance at its established U.S. namesake stores for the fiscal first quarter in nine years. It marked 19 straight quarters of same-store sales gains.
"We're monitoring the tariff discussions and are hopeful that an agreement can be reached," said Chief Financial Officer Brett Biggs. But he told reporters, "Increased tariffs will lead to increased prices for our customers."
Walmart declined to comment on what type of price hikes shoppers could expect and which products would get the biggest increases. But the specter of higher prices also was a day earlier by Macy's CEO Jeff Gennette. Target, J.C. Penney and other major retailers will be reporting results in the next few days and should shed more light on the issue.
Walmart, Macy's and other major retailers have been left largely unscathed by the first several rounds of tariffs since they focused more on industrial and agricultural products. But that changed last week when the Trump administration slapped 25 percent tariffs on imports like furniture. The administration wants to extend the 25 percent tariffs to practically all Chinese imports not already hit with levies including toys, shirts, household goods and sneakers. That's roughly $300 billion worth of products on top of the $250 billion targeted earlier.
Walmart and others have benefited from a continued strong economy and low unemployment, but shoppers continue to look for deals. In particular, Walmart's core customers who live paycheck to paycheck would be particularly sensitive to any price increases. Still, Walmart has clout with its suppliers and is working with its manufacturing partners to mitigate the impact.
Such looming extra costs come as Walmart is investing more in its business to compete with online leader Amazon in a fight to see who can get packages to customers faster.
Walmart launched free next-day delivery on its most popular items this week in Phoenix and Las Vegas. It plans to roll out next-day delivery to most of the country by year-end, covering 220,000 popular items from diapers to toys, with a minimum order of $35.
The announcement was made two weeks after Amazon said it would upgrade its free shipping for members from the standard two-day delivery to one day.
Walmart, based in Bentonville, Ark., said that U.S. sales at stores opened at least a year rose 3 percent during the fiscal first quarter, fueled by its grocery business.
U.S. e-commerce business rose 37 percent, helped by strong sales in fashion and home goods. Walmart's online growth was also fueled by its continued expansion of online grocery services, including curbside pickup and home delivery.
Walmart has about 2,450 stores that offer free grocery pickup for customers who shop online. It also has nearly 1,000 stores that offer same-day grocery delivery. The company said it was on track to offer same-day grocery delivery from 1,600 stores, while also offering grocery pickup from 3,100 stores by year-end.