Walmart Outperforms Rivals with 4.6% Sales Growth Amid Tariff Pressures

Walmart Inc. reported a robust quarter despite ongoing challenges from U.S. tariff policies, with its CEO Doug McMillon confirming the company’s strategy to absorb cost pressures where possible and pass only a portion of those costs to consumers [1]. The retail giant reported a 4.6% increase in comparable U.S. sales for the quarter ending July 31, outperforming analyst expectations and significantly outpacing its rival Target, which saw a 1.9% sales decline [2]. However, Walmart’s profit fell short of forecasts, largely due to its decision to absorb some, but not all, tariff-related costs [3].

“We’re keeping our prices as low as we can for as long as we can,” McMillon stated during the company’s earnings call, emphasizing a strategy that aligns with his earlier remarks at Walmart’s annual investor day in Dallas [4]. The CEO highlighted the company’s confidence in its procurement team, which has long-standing relationships with suppliers and is adept at navigating periods of cost volatility [5].

Walmart’s CFO, John David Rainey, added that the company had raised prices by 1% in the U.S. during the quarter, with a selective approach to passing tariff costs to consumers [6]. To manage these pressures, Walmart has also accelerated imports and introduced temporary price cuts, known as “Rollbacks,” which help offset some of the inflationary effects [7]. Rainey noted that the impact of tariff hikes is still unfolding, and the company expects these effects to become more pronounced as it replenishes inventory later in 2025 [8].

The company’s ability to maintain low prices amid rising costs has been a key factor in its strong performance. Analysts have pointed to this strategy as a significant competitive advantage, especially in a climate where consumers are increasingly cautious about their spending [9]. Walmart’s resilience is also reflected in its updated sales forecast for the year, which now anticipates a 3.75% to 4.75% increase in total sales, up from a previous range of 3% to 4% [10]. This revised outlook includes the crucial holiday season, reinforcing the company’s confidence in its pricing model and customer loyalty [11].

McMillon has also reiterated Walmart’s commitment to holiday sales, saying that “there will be a Christmas, and people will celebrate Christmas, and they will buy items, and we will sell them those items,” reaffirming the company’s role in the holiday retail landscape [12]. The CEO’s comments reflect a broader message of stability and predictability, both for customers and investors, in a market increasingly influenced by shifting trade policies [13].

Walmart’s approach to managing tariffs and pricing pressures highlights its operational discipline and strategic foresight. As trade policies continue to evolve, the company’s ability to balance cost absorption with competitive pricing could serve as a model for other large retailers navigating similar challenges [14].

Sources:

[1] The Globe and Mail (https://www.theglobeandmail.com/investing/markets/indices/IQY/pressreleases/34298138/walmart-s-2q-results-show-it-s-wooing-shoppers-and-outpacing-peers-like-target-amid-tariff-woes/)

[2] Washington Times (https://www.washingtontimes.com/news/2025/aug/21/walmart-sales-outlook-improves-despite-new-tariff-costs/)

[3] Financial Times (https://www.ft.com/content/fd81c050-2236-4dc0-900c-57f61ab08235)

[4] Yahoo Finance (https://sg.finance.yahoo.com/news/earnings-live-walmart-stock-falls-on-earnings-miss-as-ceo-flags-higher-tariff-related-costs-120535001.html)

[5] Colorado Springs Gazette (https://gazette.com/news/us-world/walmart-hikes-annual-forecast-but-profit-disappoints/article_db3a1d39-49db-5ad2-8242-dcc116156bbc.html)

[6] MarketBeat (https://www.marketbeat.com/earnings/reports/2025-8-21-walmart-inc-stock/)

[7] AOL.com (https://www.aol.com/catapults-walmart-1-trillion-valuation-160639253.html)

[8] AOL.com (https://www.aol.com/walmart-hikes-annual-forecast-low-110024142.html)