Walmart backs annual forecasts, vows to keep prices low amid tariff woes

Walmart stuck to its full-year sales and income growth forecasts on Wednesday and vowed to keep prices low, even as US President Donald Trump's sweeping tariffs fuel fears of a global recession. 

The company's shares, which have fallen nearly 9 per cent since the announcement of a raft of tariffs on April 2, rose about 5 per cent in early trading. 

"The outlook was better-than-expected given the current environment," D.A. Davidson analyst Michael Baker said on the sidelines of Walmart's investor meeting in Dallas. "That they maintained guidance is being seen positively." Walmart, which is the biggest US importer of containerized goods, is at risk of taking a hit from Trump's tariffs, mainly on Asian countries that supply everything from clothing to toys to the retailer. 

"We've learned how to manage through turbulent periods," Walmart CEO Doug McMillon said at the two-day investor meeting that started on Tuesday. 

"And while we don't know everything that is going to happen ... We do know what our priorities are, and we know what our purpose is, and we'll be focused on keeping prices as low as we can," he said. "And we'll focus on managing our inventory and our expenses well." 

The company had in February forecast sales for the fiscal year ending January 2026 to rise between 3 per cent and 4 per cent, and annual adjusted operating income to increase between 3.5 per cent and 5.5 per cent. 

Walmart also kept its first-quarter sales forecast intact, but said "the range of outcomes" for first-quarter operating income growth has widened due to several factors, including the need to reduce prices to offset the effect of tariffs on incoming goods. 

Some analysts said the focus on price is a market-share play, but one that could dent Walmart's margins and earnings. 

Walmart has already been haggling with suppliers behind the scenes over price hikes, Reuters has reported. 

The retailer in February said it expected first-quarter adjusted operating income to rise in the range of 0.5 per cent to 2 per cent. It did not provide updated figures. 

On Wednesday, however, Walmart CFO John David Rainey said many of the considerations it took while issuing that forecast had changed. Sales have changed week to week and day to day, and general merchandise sales have been soft early in the quarter. 

"Operating income has become harder to predict," he said. 

Around 60 per cent of Walmart's imports are from China, while Vietnam remains one of its top five suppliers, according to a Reuters report in November 2023. 

Trump's broad tariffs on dozens of countries took effect on Wednesday, including a 104 per cent duty on Chinese goods, deepening the global trade war. 

The retailer, however, said there was nothing in the current environment that changed its strategy.  (Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)