The timing was a little annoying.
The Walmart investors’ event – which occurs every two years and aims to present the business growth forces and strategy – also fell on the same day as the prices imposed by the United States entered into force in the world and a warmed trade war.
As the largest retailer in the United States, Walmart relies on suppliers from around the world. And for Wall Street analysts who attended the event in Dallas on Wednesday, the prices were in the lead.
Doug McMillon, managing director of Walmart, recognized uncertainty. In response to one of the analysts’ many questions about the prices, he said: “There are so many variables that take place in terms of costs, from where people get their supplies. We will have to manage this as we always do, daily.”
Or at the minute.
While the event began on Wednesday, the United States had imposed global prices, including a 104% levy from Chinese products, and China quickly retaliated with 84% prices on American products. Mr. McMillon, speaking just after the entry into force of Beijing’s additional prices, said the situation was “very fluid”. In fact, shortly after Mr. McMillon’s question and answer session with analysts, President Trump said that he interrupted his worldwide prices for 90 days and increasing the rate on China to 125%.
During the session, Mr. McMillon stressed that Walmart was well placed to cope with uncertainty, after sailing “the period after September 11, the global financial crisis, a pandemic and more recently high inflation”. Walmart customers have a large number of low -income buyers, who have less capacity to absorb higher prices than prices could provide.
John David Rainey, Walmart financial director, stressed that two thirds of what Walmart sells in the United States is manufactured, cultivated or assembled at the national level; The figure includes grocery store, which generally has lower margins. The other third of what Walmart sells comes from around the world, especially from China and Mexico, he said.
Rainey said the prices had made Walmart more difficult to predict its growth in operating income in the first quarter. “We are a week in this new pricing environment, and we always work through what it means for us,” he said. “For the current quarter, the uncertainty and the decline in consumers’ feeling led to a little more volatility in week sales and, frankly, day by day.”
Walmart reiterated expectations for sales growth in the first quarter of approximately 3 to 4% and said its annual sales growth directives have remained unchanged, customers who should be migrated to electronic commerce and delivery, key parts of Walmart’s strategy. Walmart will report its first quarter results on May 15.
