Walmart on Thursday forecast sales and profit for its latest fiscal year below Wall Street estimates, suggesting that the world’s largest retailer expects inflation-weary consumers to pull back after several quarters of solid growth.
Walmart shares, which had risen about 72% in 2024 and hit a record high of $105 last week, were down 6% in early trading. Shares of its rival retailer Target were down 1.6%, with Amazon 0.9% lower.
The news dragged down stock markets with all the major US indices falling in morning trading.
Walmart’s lower than expected guidance is a warning that US consumer spending is slowing, said Brian Mulberry, client portfolio manager at Zacks Investment Management, a Walmart investor.
“At the moment the labor market is still strong,” he said, adding that if Walmart’s soft guidance is followed by a decline in jobs, “it would be a strong signal that economic growth is slowing”.
Walmart said annual sales are expected to rise between 3% and 4%. Analysts had expected 4% growth.
As one of the first major US retailers to shed light on the crucial holiday quarter and the current year, Walmart’s forecast hints at how the retailer expects to fare under Donald Trump’s additional tariffs on goods made in China, and the threat of 25% tariffs on products made in Mexico and Canada.
Despite issuing disappointing guidance, Walmart sees US shoppers as “resilient” and focused on value, its chief financial officer, John David Rainey, said on a post-earnings call.
He said the retailer did not include an assumption of new US tariffs in its guidance, but said Walmart can manage any new duties well, without offering details.
“We’re one month into the year, so I think it’s prudent to have an outlook that is somewhat measured. We don’t want to get ahead of ourselves, there is certainly some unpredictability in any environment that we have, but we feel really good about our ability to navigate that,” Rainey said.
US retail sales experienced their largest monthly decline in two years in January, hampered by frigid temperatures, wildfires and motor vehicle shortages.
The disappointing figures from the retail giant follow a lackluster report from McDonald’s. Last week the fast-food chain reported its worst sales drop since the pandemic. Sales were hit by an E coli outbreak but the company announced it expected sales to improve over 2025.
Reuters contributed reporting
