Walmart will reinvest nearly $2.9 billion in tariff refunds into lowering prices, the company announced on its earnings call Thursday. The refunds come after the Supreme Court ruled that tariffs imposed under former President Donald Trump’s emergency powers were unlawful. This amount represents about half a percent of Walmart’s annual U.S. sales, and the retailer has now received substantially all of the funds, according to CFO John David Rainey, who said the company plans to use the money to ease consumer price pressures.
The retailer has increased its price reductions, known as “rollbacks,” to more than 11,000 items, up from roughly 7,200 at the end of the previous quarter. CEO John Furner highlighted that the number of rollbacks is the highest he can recall in recent times. The company is prioritizing investments in grocery and general merchandise categories, with notable discounts on products such as ground beef, which had seen price increases that affected customers. Walmart had previously passed on tariff-related costs to consumers, contributing to higher prices.
The Supreme Court’s decision to strike down the tariffs has allowed Walmart to recoup these funds, which it is now channeling into price leadership to improve customer experience amid a challenging retail environment. Walmart’s U.S. sales growth recently hit a six-year low, prompting the company to take a disciplined approach to reinvesting the refunds. This move comes as retailers face increasing pressure to manage inflationary impacts and maintain competitive pricing for consumers.
Walmart’s shares rose as much as 9% in Thursday trading following the earnings call. The company’s strategy to use the $2.9 billion tariff refund to boost price reductions across more than 11,000 items marks a significant effort to address consumer price sensitivity during a period of slow sales growth.