Walmart's warning for pricier baby strollers, electronics, and toys could be bad news for Best Buy, Mattel, and others

Thu, May 15, 2025, 3:13 PM 3 min read

Walmart's (WMT) tariff informing connected Thursday could beryllium a reddish emblem for the fortunes of different retailers.

"More discretionary retailers whitethorn look a murkier outlook than Walmart," CFRA expert Arun Sundaram told Yahoo Finance. "Given however fluid the tariff concern is, we whitethorn adjacent spot immoderate of these retailers propulsion guidance altogether."

America's largest retailer reported mixed numbers in its archetypal 4th report connected Thursday and said tariffs person already led to terms increases successful April and May. It reiterated its fiscal twelvemonth guidance and said it expects nett income for the 2nd 4th to summation 3.5% to 4.5%. However, it did not supply guidance for adjusted net oregon operating income for Q2.

"A batch of the terms increases that we've talked astir with tariffs person not taken effect yet. We'll statesman to spot immoderate of this arsenic we get into the backmost fractional of May ... past besides successful a much pronounced manner successful June," CFO John David Rainey told Yahoo Finance (video above). Categories astir impacted see electronics, toys, vacuum cleaners, babe strollers, and car seats, helium said.

Read more: What Trump's tariffs mean for the system and your wallet

Walmart is sending a informing awesome to Wall Street that "the afloat interaction of tariffs astir apt haven't been really flowing done the system yet," Morningstar expert Noah Rohr told Yahoo Finance.

The caller pullbacks by the Trump administration won't beryllium capable to alleviate the effects. Tariffs connected China person dropped from 145% to 30%, portion alleged reciprocal tariffs person been suspended for a 10% cosmopolitan duty, but rates are inactive overmuch higher than historically.

That could mean 2025, particularly the back-to-school season, whitethorn not beryllium arsenic beardown arsenic retailers had hoped, particularly for chains similar Best Buy (BBY). About 55% of what Best Buy sells is sourced done China, and different 20% comes from Mexico. Its shares person tanked 15% this year.

Entering 2025, galore connected the Street were optimistic that Best Buy would beryllium boosted by the replacement rhythm kicking successful astir laptops, notebooks, and phones arsenic AI features ramp up and consumers upgrade aft the pandemic spending spree of 2020.

Rohr said it's "probably just to presume that prices for those electronics and appliances and things volition spell up and perchance hold the replacement rhythm ... that volition persist astatine slightest successful the adjacent term."

In aboriginal March erstwhile tariffs connected China were 20%, Best Buy CEO Corie Barry said connected the company's net call that if the archetypal 10% tariff connected China were to enactment successful effect, it would person a "negative interaction successful the ballpark of 1 constituent of comparable sales." The 2nd 4th to 4th fourth results would amusement the brunt of that, she said.