Walmart backs annual forecasts, vows to keep prices low despite tariffs

Walmart on Wednesday reaffirmed its confidence in its everyday low price strategy, maintaining full-year forecasts for sales and income growth while pledging to keep prices low despite concerns about rising prices due to U.S. President Donald Trump’s tariffs.

The company’s shares, which were down nearly 9% since Trump announced a raft of tariffs on April 2, recouped most of those losses to close up 9.6% on Wednesday. The stock jumped about 4% after Trump set a 90-day pause on tariffs.

Walmart’s “outlook was better-than-expected given the current environment,” D.A. Davidson analyst Michael Baker said on the sidelines of the company’s investor meeting in Dallas. “That they maintained guidance is being seen positively.”

Walmart, the biggest U.S. importer of containerized goods, could take a hit from tariffs, mainly on Asian countries that supply the retailer with everything from clothing to toys.

Trump’s pause on Wednesday did not affect his tariffs on China. That country provides around 60% of Walmart’s imports while Vietnam remains one of its top five suppliers, according to a Reuters report in November 2023.

“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.”

McMillon said he has not spoken with Trump about tariffs and that, to his knowledge, the company has not yet canceled any orders from abroad. Walmart has also not issued any directives to reduce orders in specific categories. McMillon said the company is insulated because it sources more than 2/3 of what it sells domestically.

“I am talking to (Walmart’s category) buyers these days and have a good sense of how we are thinking … We have a plan to execute. There will be a Christmas and people will celebrate Christmas.”

Earlier on Wednesday, Walmart announced that it was retaining its first-quarter sales forecast, but “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.

The company in February forecast first-quarter adjusted operating income would rise in the range of 0.5% to 2%. It did not provide updated figures.

“You could ask, you know, why didn’t you withdraw guidance. We just don’t know enough to say we’re not going to make it this year. And our attitude is we’re not giving up on achieving that.”

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.

On Wednesday, however, Walmart CFO John David Rainey said many of the considerations it took while issuing that forecast had changed. “Operating income has become harder to predict,” he said.

Walmart started seeing volatility in shopping behaviors in February, in part due to tariff uncertainty and other factors like colder weather. March sales were more or less to plan but were volatile where they would be higher one week and drop off the next. April,, he said, was likely to be Walmart’s highest grossing sales month of the quarter in part due to Easter falling in April this year versus March last year, he added.

Trump on Wednesday said he would temporarily lower new tariffs on many countries, even as he raised them further on imports from China, a sudden reversal that surprised many.

“I remain in our plan,” McMillon said in comments addressed to a group of investors, analysts and reporters, before Trump’s 90-day pause. “I have seen us navigate times like the period after 9/11, the global financial crisis, the pandemic, and more recently high inflation. While in the short term we are not immune… nothing about the current environment impacts our business or our strategy,” McMillon said.

The retailer did not provide any additional comments following the pause.