While many retailers across the country are seeing their sales take a dip as consumers tighten their spending, Walmart (WMT) , the largest retailer in the U.S., has managed to keep its sales afloat.
In its first-quarter earnings report for fiscal year 2026, Walmart revealed that its U.S. comparable sales increased by 4.5% year-over-year, while the average number of transactions and amount of money shoppers spent per purchase spiked.
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This increase in sales contributed to Walmart generating $5.7 billion in its U.S. operating income, which is 7% higher than what it earned during the same quarter last year.
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During an earnings call on May 15, Walmart CEO Doug McMillon said the increased sales “were not driven by inflation,” but higher transactions. He also said that despite increased sales in health and grocery categories, the company has noticed customers are pulling back their spending in other areas.
“Health and wellness sales increased high teens, reflecting higher prescription volumes and over-the-counter sales, while general merchandise sales declined slightly with softness in electronics, home products, and sporting goods,” said McMillon.
Walmart’s CEO is speaking out about the impact of tariffs.
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Walmart CEO issues a stern warning amid growing threat
As Walmart faces increased momentum from consumers, McMillon has issued a major warning about the future of the company’s prices amid President Donald Trump’s ever-changing tariff policy (tariffs are taxes companies pay to import goods from overseas).
On April 2, Trump announced a 10% “baseline” tariff on all countries importing goods to the U.S., with roughly 60 countries seeing higher tariff rates. Then, on April 9, he enforced a 90-day pause on reciprocal tariffs on all countries (except China), dropping them to a universal rate of 10%. He also hiked tariffs on China to a whopping 145%.
However, earlier this week, Trump agreed to lower tariffs on China from 145% to 30% after recent negotiations.
McMillon said that despite Trump’s recent efforts to lower tariffs, Walmart still won’t be able to fully absorb all of the extra costs it will face to import goods.
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“We will do our best to keep our prices as low as possible,” said McMillon. “But given the magnitude of the tariffs, even at the reduced levels announced this week, we aren’t able to absorb all the pressure given the reality of narrow retail margins. In retail, managing inventory is always important. In this situation, it’s even more important and even more challenging.”
Walmart U.S. CEO John Rainey emphasized during the call that customers will see higher prices for goods as a result of tariffs.
“We’re very pleased and appreciative of the progress that’s been made by the administration to bring tariffs down to this level…” said Rainey. “But let me emphasize, we still think that’s too high. There are certain items, certain categories of merchandise that we’re dependent upon to import from other countries. And prices of those things are likely going to go up, and that’s not good for consumers.”
However, McMillon said keeping food prices low is one of Walmart’s top priorities.
“We want to keep our food and consumables prices as low as we can. Food prices in the U.S. have gone up in recent years, and our customers have been feeling that all along,” he said. “We won’t let tariff-related cost pressure on some general-merchandise items put pressure on food prices. But as it relates to food, tariffs on countries like Costa Rica, Peru, and Colombia are pressuring imported items like bananas, avocados, coffee, and roses.”
Walmart recently made a bold move to dodge tariff impact
The warning from Walmart comes after its executives met with Trump on April 21 to discuss his tariff policy.
“We had a productive meeting with President Trump and his team and appreciated the opportunity to share our insights,” said a Walmart spokesperson last month in a statement to TheStreet.
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It is no surprise that Walmart is growing concerned about the impact tariffs could have on its business, as many consumers are already changing the way they shop in order to save money.
According to a recent survey from market research company Numerator, 83% of Americans are changing their shopping habits to prepare for the higher prices Trump’s tariffs could bring. Some of these changes include scavenging for sales and coupons, delaying purchases, and buying fewer imported goods.
Amid this trend, Walmart’s foot traffic in stores during the first few months of the year declined by 2.4% year-over-year, according to recent data from Placer.ai.
In February specifically, Walmart visits shrank by 5.9% year-over-year, and in March, visits fell by 4%. However, visits shot back up by 4.5% in April, aligning with the Easter holiday.
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