Despite the decision made on Wednesday by President Donald Trump to temporarily halt most of his controversial tariff increases, the threat to retailers remains significant. There is still a possibility that tariffs could be reinstated in the coming months, creating ongoing uncertainty for businesses as they start planning for the holiday season.
Walmart Inc.’s CEO, Doug McMillon, addressed investors, emphasizing that the company has successfully navigated through previous periods of uncertainty, such as the tariff hikes of 2018 and the inflation surge following the pandemic. He assured investors that Walmart has a solid strategy in place moving forward.
“We have a plan to execute. There will be a Christmas, and people will celebrate Christmas, and they will buy items, and we will sell them those items,” McMillon stated during a media briefing at the conclusion of Walmart’s 2025 investor day in Dallas.
Walmart’s plans include maintaining a robust inventory and keeping shelves stocked despite trade uncertainties. This is achievable partly due to the company’s strong influence with vendors, which allows it to absorb a significant portion of potential cost increases.
McMillon expressed confidence in the company’s buyers, emphasizing their tools to manage long-standing supplier relationships and belief in their effective execution.
Navigating the current trade landscape remains complex for the retailer. Although Walmart imports only one-third of its products, China is a major source of its inventory. China was not included in Trump’s tariff pause and was, instead, targeted for higher tariffs, presenting a significant risk for a substantial portion of Walmart’s products.
McMillon, who has extensive experience as a buyer at Walmart and Sam’s Club, indicated that higher tariffs can be mitigated by having higher-margin, higher-priced products subsidize lower-margin items. Essentially, the increased costs due to tariffs can be offset by adjusting prices on items with low price sensitivity.
Walmart holds a strategic advantage over many competitors due to the replenishable nature of many of its goods. This minimizes the risk associated with unsold seasonal merchandise, as the company can simply halt or reduce new inventory orders if demand declines.
“Right now, our merchants are thinking about quantities,” McMillon remarked, but he clarified that the company has “not canceled anything yet.”
This report was originally published on Fortune.com.