As Walmart prepares to announce its annual sales, investors worry that President Donald Trump's announced tariffs on foreign-made merchandise could threaten its low-cost model.
The results, which will be publicly revealed on Thursday, will likely show that Walmart's revenue rose by nearly 5% for the year ending January 31st, Reuters reported.
With many of its products sourced from China, Walmart could face dangers to its low-cost model.
Analysts predict a revenue growth slowdown to 4% due to concerns about Trump's tariffs.
While the retailer has cut reliance on China, price hikes could hurt sales for Walmart's low-cost products--which is a growing concern for investors.
Randy Hare, director of research at Huntington Private Bank, a Walmart investor remained cautious, saying, "We are listening intently to see what guidance they give surrounding this."
Meanwhile, Brian Mulberry, client portfolio manager at Zacks Investment Management, a Walmart investor, said he's focusing on the Great Value brand, using it as a yardstick to assess risk.
"We will be watching for any pressure on margins on the Great Value and other in-house brands as they have been responsible for adding positive growth to bottom line margins," Mulberry said.
As one of the largest U.S. retailers, Walmart's sale serve as a barometer for consumer spending.
The Consumer Price Index for January was released last week and it showed inflation in the country rose by 0.5%, much more than analysts expected 0.3% forecast.
