Walmart, Inc. (NYSE:WMT) shares were trading lower Thursday after the company reported its first earnings miss in three years.
Warnings from CEO Doug McMillon on the negative impact of tariffs, further pressured the stock.
- WMT stock is slipping. Check the real-time price action here.
McMillon told investors and analysts on Walmart's Q2 earnings call that the mega retailer is feeling the effects of President Donald Trump's tariffs on its bottom-line.
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"We've continued to see our cost increase each week, which we expect will continue into the third and fourth quarters," he said.
The CEO added that the company has been able to absorb much of the added cost and only slight changes in consumer spending have been seen.
"Customers have not significantly altered their buying habits due to tariffs; however, some middle and lower-income families have cut back on certain discretionary items that have seen price increases," McMillon said.
"Walmart's ability to absorb tariff costs without drastic price hikes, passing along only 4% to 5% of increased expenses to consumers, has been critical," he added.
McMillon pointed to Walmart's efforts to diversify its supply chain as having successfully shifted 30% of its China-sourced items to Vietnam, Mexico and India, helping to reduce the impact of tariffs.
However, the retailer expects to see tariff-related costs rise in the second-half of the year.
"Given tariff-related cost pressures, we’re doing what we said we would do — we're keeping our prices as low as we can for as long as we can," McMillon said.
WMT Stock Price: According to Benzinga Pro, Walmart shares were down 5.02% at $97.42 at the time of publication Thursday.
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