Walmart Warns Trump Tariffs Could Squeeze Quarterly Profits Despite Stable Sales Outlook

Dallas, TX — Walmart on Wednesday said the implementation of President Donald Trump’s latest round of sweeping tariffs could significantly impact its profitability in the current quarter, prompting the retail giant to withdraw its first-quarter operating income forecast. The announcement underscores mounting corporate concern about the financial fallout of escalating trade tensions.

In a statement, the company said it wants to "maintain flexibility to invest in price as tariffs are implemented,” suggesting it may absorb higher import costs to shield consumers from price hikes. The big-box retailer did not provide a revised profit range but had previously projected an increase of 0.5% to 2.0% in adjusted operating income for the quarter.

Despite the uncertainty, Walmart reaffirmed its full-year sales forecast, expecting net sales to grow between 3% and 4% in fiscal 2025.

Tariffs Hit Key Supply Chains

The announcement came just hours after new tariffs—some as high as 104% on imports from China and 46% on Vietnamese goods—took effect. The duties are part of a broader shift in trade policy that has drawn mixed reactions from U.S. businesses. Walmart sources roughly one-third of its merchandise from global markets, with China and Mexico being among its largest foreign suppliers.

“We’re still working through what this [new tariff environment] means for us,” said Walmart CFO John David Rainey during an investor presentation on Wednesday. “Operating income has been harder to predict, and we’ve widened our internal range of scenarios, given the current backdrop.”

The tariffs are expected to impact a wide range of products, from electronics and apparel to general merchandise—categories that generally deliver higher margins than groceries.

Volatility in Consumer Spending

While Walmart’s grocery and essentials categories continue to drive stable sales, its higher-margin general merchandise division has shown signs of softness. Rainey noted "a little more sales volatility week to week and, frankly, day to day" as a result of weakening consumer sentiment.

“The uncertainty and decline in consumer sentiment has led to changes in purchasing behavior,” he said.

Walmart CEO Doug McMillon, speaking to investors ahead of the retailer's two-day event in Dallas, acknowledged the fluid nature of the current retail landscape.

“Clearly, our environment has changed,” McMillon said. “While we don’t know everything that’s going to happen, we know our priorities—we’ll stay focused on keeping prices as low as we can.”

Full-Year Outlook Reaffirmed

Despite pulling its Q1 profit forecast, Walmart held firm on its full-year guidance, reflecting confidence in its long-term strategy. The company expects:

• Net sales growth of 3% to 4%

• Adjusted operating income to increase between 3.5% and 5.5% (on a constant currency basis)

• Full-year adjusted EPS of $2.50 to $2.60, factoring in a five-cent currency headwind

This guidance also includes a 1.5 percentage point drag from the company’s acquisition of Vizio and the 2024 leap year.

Inflation and Inventory Pressures Remain

Walmart also attributed the uncertainty in short-term profitability to insurance-related costs and a less favorable merchandise mix, as inflation continues to shape consumer priorities. More shoppers are gravitating toward lower-margin items such as groceries and household essentials, while discretionary categories like clothing and electronics remain under pressure.

McMillon said Walmart will remain agile and cost-conscious during this volatile economic phase.

“We’ve learned how to manage through turbulent periods,” he told attendees. “Especially these last couple of years—it’s been one thing after the other.”

Retail Industry Reacts to Trade Policy Shifts

Walmart joins a growing list of major U.S. companies raising concerns about the impact of the new tariff regime. Delta Air Lines earlier in the day warned that declining bookings tied to trade uncertainty have forced the carrier to pause capacity expansion plans and reevaluate its own 2025 outlook.

The White House has yet to offer specific relief or revisions to the policy. Treasury Secretary Scott Bessent recently stated that more than 70 countries have approached the administration to begin trade negotiations.

Walmart's leadership, meanwhile, says it remains focused on managing costs, protecting margins, and delivering value to customers, even as global trade dynamics remain unpredictable.