Walmart stands by its annual financial outlook but pulls back 1Q view

NEW YORK >> Walmart, the nation’s largest retailer, is standing behind its full-year sales and operating income outlook even as President Donald Trump has launched tariff wars with China and nearly every trading partner that have brought a wave of economic uncertainty.

The Bentonville, Arkansas-based company said Wednesday that it continues to expect first-quarter sales growth of 3% to 4%. But it walked away from its guidance for first-quarter operating profit growth of between 0.5% to 2%, citing the risk of tariffs. It didn’t provide a new range. Walmart said in a release the range of outcomes has “widened due to less favorable category mix” and “the desire to maintain flexibility to invest in price as tariffs are implemented.” The announcement comes the same day that Walmart is holding an investor conference featuring key leaders in Dallas.

— The Associated Press

It also comes the same day that Trump’s trade wars have escalated, raising the risk of a recession and causing panic in the financial markets. Trump’s latest round of tariffs went into full effect at midnight Wednesday, with higher import tax rates on dozens of countries and territories taking hold.

On Wednesday, China raised tariffs on American goods to 84% to match Trump’s addition of a 50% tariff, while adding an array of additional countermeasures Wednesday.

The 84% tariff will be effective Thursday, and comes as a 104% tax on the country’s exports to the U.S. came into effect.

Walmart has built in hedges against some tariff threats. Two-thirds of Walmart’s merchandise is sourced in the U.S., with groceries driving much of that. Groceries account for roughly 60% of Walmart’s U.S. business.

But Walmart faces challenges with the new tariffs because they carry more economic risks than during Trump’s first term. A wave of new price increases would deal a blow to its lower- and middle-income shoppers who have already been pulling back in the last year or so because of still-high inflation on necessities.