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Walmart reports jump in profit, warns on tariffs

AFP  |  New York 

reported a jump in first-quarter earnings Thursday on increased US store sales and eCommerce growth, but warned that higher US tariffs could hit its business.

The world's biggest retailer, which has been unveiling new "omnichannel" including a just-announced next-day delivery service in many US markets, pointed to increased US sales as evidence the strategy was working.

But executives joined a chorus of who have warned about tariffs in the wake of the Trump administration's latest moves in the long-running US-dispute.

has started a process to impose new duties on about USD 300 billion worth of additional Chinese merchandise that cover virtually everything sells to the and encompass household items such as clothing and appliances.

"We're going to continue to do everything we can to keep prices low. It's who we are," said on a conference call with reporters.

"However increased tariffs will lead to increased prices for our customers."

Biggs said it was impossible to generalise about the effects of the potential hikes, saying that the effect of levies varies by good.

He declined to comment on specific item categories for competitive reasons.

Earnings for the first quarter came in at USD 3.8 billion, an increase of 80 per cent from the year-ago period when results were dented by a one-time earnings hit following US tax reform.

Revenues climbed one per cent to USD 123.9 billion.

Comparable sales at US stores -- a key closely-watched by Wall Street -- jumped 3.4 per cent, marking the company's best performance in nine years, the company said.

highlighted the strong US figures, which come as the company ramps up programs to allow customers to pick up groceries that are ordered online and provide more direct delivery of goods.

New ventures include voice ordering for grocery and free next-day delivery of frequently purchased items for orders of USD 35 or more in the

shares rose 2.0 per cent to USD 101.85 in early trading.

The strong domestic results offset a decline in international sales and profits.

The company highlighted a hit from the strong dollar, as well as unspecified "political headwinds" in some markets that weakened results.

International results have also been dented by increased investment in Flipkart, an Indian acquired by last year.

praised the results overall.

"Price investments are continuing, though improved efficiencies are serving to protect margins," O'Shea said in written comments.

"On the international front, results are negatively impacted by losses at Flipkart, which we continue to believe is a very sound long-term investment in a compelling market."

O'Shea said the effect of tariffs on Walmart would be "limited" because of the extent of its business and because the company "has the wherewithal both financially and via its vendor relationships to minimise the impact on both itself and its shopping base."

Leading have amplified warnings about the latest Trump threats on

The latest list is "far too great a gamble for the US economy," said this week.

"Taxing Americans on like clothes and shoes is not the answer for holding China accountable."

also signalled increased anxiety about tariffs in its earnings conference call Wednesday.

said the retailer has largely managed the initial rounds of tariffs in the US-China dispute.

But the latest round being discussed is "the big one" and if it goes into effect, will "affect a lot of the apparel and accessory categories that are coming in," Gennette said.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Thu, May 16 2019. 20:16 IST