The timing was a bit cumbersome.
Walmart's investor event, which takes place every two years and is supposed to present the company's strengths and strategy for growth, also fell on the same day when the US tariffs came into force worldwide, and a trade war.
As the largest retailer in the USA, Walmart is dependent on suppliers from all over the world. And for the Wall Street analysts who took part in the event in Dallas on Wednesday, the tariffs were in the foreground.
Doug McMillon, Chief Executive from Walmart, recognized the uncertainty. In response to one of several questions from analysts, he said: “There are so many variables that take place as to what the costs will be, where people are. We have to manage this every day.”
Or in minute.
When the event began on Wednesday, the United States had imposed worldwide tariffs, including a tax of 104 percent for Chinese goods, and China quickly returned with 84 percent tariffs for US goods. Mr McMillon said shortly after Beijing's additional tariffs came into force, said the situation was “very fluent”. In fact, President Trump said, not long after Mr. McMillon's question and answer session with analysts that he held his global mutual tariffs for 90 days and increased the rate for China to 125 percent.
During the session, Mr. McMillon emphasized that Walmart was well placed in order to cope with uncertainty, since he “the period after September 11th, the global financial crisis, a pandemic and an in younger high inflation”. Walmart's customer base includes a large number of buyers with lower incomes that have fewer capacities to absorb the higher prices that the tariffs could bring.
John David Rainey, Walmarts Chief Financial Officer, emphasized that two thirds of what Walmart sells in the United States is located, built or gathered. The illustration includes food that generally have lower edges. The other third of what Walmart sells comes from all over the world, especially from China and Mexico, he said.
Mr. Rainey said the tariffs made Walmart more difficult to predict their operational income growth in the first quarter. “We are a week in this new wage environment and are still working on what this means for us,” he said. “For the current quarter, the uncertainty and the decline in consumer mood from week to week and frankly led to a little more sales volatility and openly from day to day.”
Walmart confirmed the expectations of sales growth in the first quarter of around 3 to 4 percent and said that the instructions for annual sales growth have remained unchanged, whereby customers are still expected to hike towards e-commerce and delivery, key parts of the strategy of Walmart. Walmart will report its results in the first quarter on May 15.