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A scolding from President Trump comes with a side of stock-price pressure for Walmart (WMT).
Shares of the retail giant fell around 2% in pre-market trading on Monday following Trump's weekend social media post, which urged the company not to increase its prices because of tariffs on Chinese imports.
"Walmart should STOP trying to blame Tariffs as the reason for raising prices throughout the chain. Walmart made BILLIONS OF DOLLARS last year, far more than expected. Between Walmart and China they should, as is said, 'EAT THE TARIFFS,' and not charge valued customers ANYTHING. I’ll be watching, and so will your customers!!!," Trump said in a post on Truth Social.
Walmart's stock has been one of the market's top-performers of the past year amid strong sales and profits, rising 54% compared with a 6% advance for the Dow Jones Industrial Average (^DJI).
"We have always worked to keep our prices as low as possible, and we won't stop. We'll keep prices as low as we can for as long as we can, given the reality of small retail margins," a Walmart spokesperson told Yahoo Finance.
Walmart CEO Doug McMillon was among the CEOs who met with Trump in late April to discuss tariff implications. A person familiar with the discussions told Yahoo Finance Walmart made a case to remove tariffs on China altogether as even lower tariffs would have major implications on prices for general merchandise items such as furniture and toys.
The Trump administration and China agreed to dial back tariffs for 90 days last week. The US tariff rate on China currently sits at 30%, down from 145% at the height of the trade tussle between the economic superpowers.
"Low prices is what we stand for, and we're going to keep prices as low as we can as long as we can," Walmart CFO John David Rainey said on Yahoo Finance's Catalysts (video above) last week in the wake of the company's first quarter earnings. "But when you look at the magnitude of some of the cost increases on certain categories of items that are imported, it's more than what retailers can bear. It's more than what suppliers can bear."
"And so we'll work hard to try to keep prices low. But it's unavoidable that you're going to see some prices go up on certain items."
Rainey said price increases will be noticeable later in May
Rainey added, "Well, if you've got a 30% tariff on something, you're likely going to see double digits [in price increases]."
The most impacted areas for Walmart will include baby strollers, furniture, and toys. Price hikes in these departments could major impacts on suppliers such as Newell Brands (NWL), reports Yahoo Finance's Brooke DiPalma.
