Walmart Stands Strong Despite Tariffs, Hits E-commerce Profitability

“We’re getting more out of our stores and clubs than before, and e-comm has contributed 50 percent of that growth,” Rainey said. “We’ve set off this virtuous cycle, investing in the business to drive above-trendline growth, higher incremental margins, which in turn allows us to reinvest back into the business and generate improved financial returns for shareholders. This cycle results in ROI continuing to improve into the future.

“We are truly and uniquely a scaled omnichannel retailer,” he said. “We are one of one.”

And to drive that point home, Rainey revealed that Walmart’s U.S. e-commerce business is trending toward profitability in the current quarter and is expected to be profitable on an annual basis.

“This is a milestone moment for our company and we expect to see the benefits and margins in the future years,” he said.

On almost any other day, that might have been the headline, but Trump’s tariffs are almost all that’s on anyone’s mind, on Wall Street and in retail.

While companies have been poring over every news alert and closely watching the body language from Trump and his inner circle, there has been only the start of a reaction. In part, that’s because the tariff increases—if they stick—are seemingly big enough to break practically any business model in fashion or retail.

And so the fact that Walmart was able to put such a brave face on the situation was reassuring.

“We’re one week into this new tariff environment and we’re still working through what this means for us,” Rainey said. “As a reminder, though, more than two thirds of what we sell in the U.S. is made, grown or assembled in the U.S.

“We want to keep prices low,” he said. “Our team is experienced with managing price over a portfolio of items. We want to manage our inventory well and we want to manage our cost.”

Already, there have been reports that Walmart is trying to get its suppliers on the back end to bear at least some of the cost of the increases.

Meanwhile, Walmart is confronting an increasingly skittish shopper on the front end of its business.

“For the current quarter, the uncertainty and decline in consumer sentiment has led to a little more sales volatility week-to-week and frankly, day-to-day,” Rainey said. “But we still expect [first-quarter] sales to be in the range of guidance of 3 percent to 4 percent growth. Operating income has been harder to predict and we’ve widened our internal range of scenarios.”

Walmart also stood by its sales and operating income growth guidance for the year.

But given that it’s still just April, the company—and retail generally—still has time to hope that the trade war smoke clears before annual numbers are due.