Breakfast Bites - Walmart warns of price increases
US Retail Sales, PPI and Fed Chair Powell in focus
Rise and shine everyone.
Today’s focus will be on the US Retail Sales report and the PPI to a lesser extent - both released at 8:30 am ET. Chair Powell speaks at 8:40 am ET.
The March Retail Sales report came in at 1.5%, beating estimates but Bank of America estimates a drop in retail sales for April. Some of this is based on their card spending read-through ,and some of it is one-time seasonal adjustments to the report.
The other major news for today was Walmart’s earnings.
“Walmart reported a 4.5% increase in U.S. comparable sales for the quarter ending May 2, with strong performance in grocery and digital channels. Global e-commerce sales surged 22%, driven by its low-price strategy and growing online delivery options. Despite a 12.1% drop in net income to $4.5 billion, largely due to costs associated with the Vizio acquisition and wage hikes, Walmart maintained its full-year sales and profit forecasts, signaling confidence in its ability to navigate economic uncertainty.
Looking ahead, Walmart faces headwinds from ongoing US-China trade tensions and rising tariffs, which have pressured margins despite strategic stockpiling and supply chain diversification. The recent temporary reduction of tariffs to 30% from 145% brought short-term relief, but volatility in trade discussions continues to cloud the outlook. CEO Doug McMillon acknowledged the challenge of keeping prices low amid tariff pressures, while CFO John David Rainey emphasized the unpredictability of the current operating environment, making near-term forecasting difficult.”
So there we have it… one of the biggest retailers in the US is starting to talk about price increases because of tariffs.