How Walmart’s CEO navigated tariffs to post a solid quarter: ‘We’re keeping our prices as low as we can for as long as we can’

Economy·Fortune 500How Walmart’s CEO navigated tariffs to post a solid quarter: ‘We’re keeping our prices as low as we can for as long as we can’By Phil WahbaBy Phil WahbaSenior WriterPhil WahbaSenior WriterPhil Wahba is a senior writer at Fortune primarily focused on leadership coverage, with a prior focus on retail.SEE FULL BIO The good news? Walmart on Thursday reported another quarter of healthy sales growth

The bad news: Its fit fell short of Wall Street forecasts, in part because of how it is managing all the tariff uncertainty

The massive big-box chain said that comparable U.S. sales in the quarter July 31 rose 4.6%, more than analysts expected and certainly much better than the 1.9% drop at its struggling rival Target

Still, its fit missed the mark slight for a variety reasons including its decision to absorb the costs of tariffs on some items (though certainly far from all). “With regards to our U.S. pricing decisions, given tariff-related cost pressures, we’re doing what we said we would do,” CEO Doug McMillon told investors on the company’s earnings call. “We’re keeping our prices as low as we can for as long as we can.” Also helping is that consumers have ven quite resilient, he added. “Their behavior has been generally consistent

We aren’t seeing dramatic shifts.” To be sure, the impact of higher tariffs is only now beginning to kick in at Walmart and other retailers

Rainey told CNBC that Walmart has been managing tariff hikes by accelerating imports from abroad and also offering temporary items, which the retailer calls “Rollbacks.” “This is managed on an item-by-item and category-by-category basis,” he told the news oulet. “There are certainly areas where we have fully absorbed the impact of higher tariff costs

There are other areas where we’ve had to pass some of those costs along.” Indeed, Walmart is doing what McMillon said it would

In April, at its annual investor day in Dallas, the CEO said Walmart’s buyers know how to navigate periods of cost increases. “Some of the confidence that we’ve been expressing is really founded on: We know who these buyers are,” said McMillon at the time. “They have great tools to manage this long-standing supplier relationship, and we believe that they will execute well.” It helps that Walmart has enormous clout with vendors, which rely on the retailer for a big portion of their sales, and can convince them to shoulder some of the burden

That ability to shield customers and keep prices low are key reasons Walmart has been a top performing retailer since President Trump announced higher tariffs on many trading partners this spring. (Tariff rates and target countries have shifted many times, adding to Walmart’s operational complexity.) Walmart Inc, which also operates the Sam’s warehouse s and a big international , raised its full year sales forecast on the strength of the second-quarter, and now expects sales to rise 3.75% to 4.75% this year, compared to an previous forecast of a 3% to 4% increase

And that will include that crucial holiday season

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