Walmart Slides, Tariffs Could Cause Further Decline
On Thursday, the Walmart (WMT) quarterly earnings report pushed stock prices down, even though they showed a mostly strong performance from the retailer.
Walmart did well in 2024, in both earnings per share and revenue, according to their earnings report. However, that was not enough to keep their stock price high as the company has a poorer outlook for 2025. The WMT price fell more than 6% as a result.
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By the end of trading Thursday, the price of Walmart had stabilized and finished that day at $97.47. We do expect further decline for the company in the coming week, especially as new tariffs kick in and increase the cost of imported goods for the retailer.
Walmart’s Tariff Problem
Since coming into office President Donald Trump has threatened to issue tariffs to countries that the United States does business with, and in the last week, he has made good on those threats.
The biggest recipient of US tariffs is China, which did not back down when Trump issued tariffs against all imported Chinese goods. Instead, the Chinese government issued their own retaliatory tariffs on the US.
Trump is looking to take a similar tack with other countries, issuing retaliatory tariffs on goods from those nations that charge the US tariffs. While no tariffs have been issued to Mexico and Canada, because the two governments reached an agreement with the United States concerning border security, the same option will likely not be available to other countries.
The US is likely to start issuing reciprocal tariffs very soon. Trump has already instituted 25% tariffs on any steel and aluminum that comes in from other countries, as well as an additional 10% on any Chinese goods.
What this means for Walmart, which receives much of its inventory from China, is that they will incur greater costs in 2025, as long as the trade war between China and the United States continues. They also receive considerable shipments from Mexico and Canada, as well as the United Kingdom, Taiwan, and France.
Walmart has already issued a statement on tariffs and rising costs, saying that they will pass those increased costs onto consumers. The company’s chief financial officer said that this would particularly impact electronics and general merchandise, and consumers should start to see those price increases very soon, if the higher costs start to affect Walmart’s profit margins.
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