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NEW YORK — Walmart delivered another year of strong sales and profits as its competitive prices became a strong magnet for inflation-weary shoppers. Yet uncertainty about the state of the American consumer and the potential impact of tariffs have seeped into expectations for 2025. The Feb.
20 financial outlook from nation's largest retailer, which has thrived amid stubborn inflation, delivered a jolt across the retail sector. Walmart sees its per-share profit over the next year coming in as much as 27 cents below projections, a notable shift that sent its shares down more than 6 percent on Thursday. The company's sales outlook was also mild, potentially a reflection of challenges ahead as consumers pull back on spending and President Donald Trump's tariffs on China and other countries threaten the low-price model that is the core of Walmart's success.
Walmart finance chief John David Rainey said shoppers remain resilient while cautious, but he sees no apparent change in behavior related to tariffs. But there is more uncertainty about what lies ahead, and Rainey said Walmart's measured guidance reflects that. "We are one month into the year, and there's a lot that we don't know," Rainey said, citing the new tariff increases.
Walmart, which has a large import center in Dorchester County and is South Carolina's largest private-sector employer, did not incorporate higher tariffs into its financial outlook. But Rainey acknowledged the company's isn't immune to their impact. "We're going to work really hard to keep prices low for our members and customers," he said.
"We will do the things that we can." That means being nimble in some areas. Walmart, for example, is exploring new sourcing for microwave ovens given increased tariffs on aluminum and steel.
But Rainey said the company might need to raise prices on some goods. Tariffs in the headlines have fueled concern and some additional shopper retrenchment in Walmart's Mexico business, Rainey said. Walmart has built in hedges against some tariff threats.
Two-thirds of its merchandise is sourced in the U.S., with groceries driving much of that.
Supermarket products account for roughly 60 percent of the U.S. business.
Still, Walmart shares took a hit, and other big retailers fell, too. Walmart is among the first major U.S.
retailers to report financial results and the numbers can provide a hint as to the mood of the American shopper. Over the past year consumers have focused increasingly on necessities rather than big TVs, furniture or appliances. They've become much more discerning because of higher costs for credit as well as for groceries.
Walmart has flourished in that environment. It's gained market share, notably among households with incomes over $100,000. The retailer's online offerings and paid membership, Walmart +, have also drawn wealthier customers.
"We have momentum driven by our low prices, a growing assortment, and an e-commerce business driven by faster delivery times," said CEO Doug McMillon. "We're gaining market share, our top line is healthy, and we're in great shape with inventory." Still, Walmart could be faced with challenges with the new tariffs carrying more economic risks than during Trump's first term.
If Americans are hit by a new wave of price increases, economists say, and with 70 percent of the U.S. economy driven by consumers a broad pullback in spending would have ramifications beyond Walmart's sales.
Government data last week revealed a sharp drop in January retail sales as cold weather kept more Americans indoors. But it was a much bigger drop than economists expected and the biggest in a year. Walmart reported earnings of $5.
25 billion, or 65 cents per share, in the quarter ended Jan. 31. That compares with $5.
49 billion, or 68 cents per share, in the year-ago period. Adjusted earnings per share for the most recent quarter was 66 cents. Sales rose 4.
1 percent to $180.55 billion in the quarter. Analysts expected 65 cents per share on sales of $180.
07 billion, according to FactSet. For Walmart's U.S.
division, comparable store sales — which include online and stores open for the past 12 months — rose 4.6 percent in the U.S.
, a bit lower than the 5.3 percent in the previous quarter. The retailer had a 4.
2 percent jump in the U.S. in the second quarter and 3.
8 percent in the first quarter. Global e-commerce sales rose 16 percent in the latest quarter, notably slower than the 27 percent increase in the third quarter. Walmart expects first quarter earnings per share of between 57 cents and 58 cents, well below the 64 cents Wall Street was expecting, and for the year.
It projects earnings on a per-share basis in the range of $2.50 to $2.60, well below the $2.
77 that analysts are predicting. It forecast a 3 percent to 4 percent increase in quarterly sales or between $166.35 billion and $167.
97 billion. That is also a bit light, with forecasters expecting sales of $167.05 billion.
Walmart estimated its annual sales to rise between 3 percent and 4 percent, or to between $667.57 billion and $674.05 billion.
That too falls short of the $708.7 billion that Wall Street projected..
