AN D’Hynenzio, AP Retail Writer
NEW YORK (AP) — Walmart has brought another year of strong sales and profits as competitive prices have become a strong magnet for shoppers who withstand inflation. However, the uncertainty about the state of American consumers and the potential impact of tariffs permeates expectations for 2025.
Financial outlooks from the nation’s biggest retailers, which flourished amidst stubborn inflation, shocked the entire retail sector. Walmart expects earnings per share next year to be under 27 cents as analysts’ forecast.
Its sales outlook is also mild, reflecting future challenges as consumers pull back spending and President Donald Trump’s tariffs on China and other countries threaten Walmart’s low-cost model, which is the core of Walmart’s success. It may be.
In an interview with the Associated Press on Thursday, Walmart Chief Financial Officer John David Rainey said shoppers are resilient while being cautious, but there has been no clear change in tariff-related behavior. I did.
There is even more uncertainty about what’s ahead, and Rainey said Walmart’s measured guidance reflects that.
“We’ve been in a month this year and there’s a lot we don’t know,” Rainey said, noting that new tariffs have increased.
Walmart did not incorporate tariffs into its financial outlook, but Rainey admitted it was not affected by the company’s impact.
“We’re going to work really hard to keep prices low for our members and our customers,” Rainey said. “We’ll do what we can.”
That means being agile in sourcing. For example, Walmart is investigating new sourcing for microwave ovens, taking into account the increased tariffs on aluminum and steel. However, Rainey said prices could rise for some products.
Headline tariffs are driving concerns and shopper cuts in Walmart’s Mexican business, Rainey said.
Walmart has incorporated hedges in opposition to the threat of tariffs. Two-thirds of Walmart’s products are sourced in the US, and groceries drive the majority of it. Grocers account for approximately 60% of Walmart’s US business.
Still, Walmart stocks were hit and other major retailers fell.
Walmart was one of the first US retailers to report financial results, and the numbers can provide hints on the atmosphere of American shoppers. Over the past year, Americans have increasingly focused on essentials rather than big TVs, furniture and appliances. They are much more discernible because of the high cost of credit as well as food.
Walmart flourished in that environment. Market share is gained, especially among households with incomes over $100,000. Walmart’s online offering and paid membership Walmart+ also attracted wealthy customers
“We are driven by an e-commerce business driven by low prices, growing assortment and fast delivery times,” said CEO Doug McMillon. “We’re gaining market share, our top line is healthy and we’re on very good track record in stock.”
Still, Walmart could face challenges with new tariffs that carry more economic risks than Trump’s first term. If Americans are hit by a new wave of price rises, economists say, and at 70% of the US economy driven by consumers, a wide range of spending pullbacks will have an impact beyond Walmart sales Sho.
Government data revealed last week that the cold weather kept more Americans indoors, causing a sharp drop in retail sales in January. But that was a much larger decline than economists had expected, the biggest in a year.
Bentonville, Arkansas-based Walmart reported $5.25 billion, or 65 cents per share, for the quarter ended Jan. 31. The latest quarter’s earnings per share adjustment was 66 cents. Quarterly sales increased 4.1% to $1805.5 billion.
According to Factset, analysts had expected 65 cents per share with sales of 65 cents per share.
In Walmart’s US division, comparable store sales, including online and stores, rose 4.6% in the US over the past 12 months, slightly lower than 5.3% in the last quarter. Retailers jumped 4.2% in the US in the second quarter and 3.8% in the first quarter.
Global e-commerce sales rose 16% in the recent quarter.
Walmart expects first-quarter earnings per share between 57 cents to 58 cents. Walmart projects earnings per share in the range of $2.50 to $2.60. According to FactSet, this is also a staggering $2.77, analysts predict.
It is projected to increase between 3% and 4% in quarterly sales, or between $1663.5 billion and $1679.7 billion. It’s also a bit lighter as analysts expect sales of $167.05 billion.
Walmart expects annual revenue to increase between 3% and 4%, or between $6675.7 billion and $67.405 billion. That too, except for the $70.872 billion Wall Street forecast.
Original issue: February 20, 2025 9:09am EST
