Walmart has decided to withdraw its operating income forecast for the first quarter, citing ongoing uncertainty regarding the impact of sweeping tariffs imposed by President Donald Trump.
In a statement released Wednesday, the retail giant emphasized the need to “maintain flexibility” as it navigates the potential effects of the tariffs on goods imported from countries such as China and Vietnam.
The company had previously projected a modest increase in adjusted operating income for the first quarter, ranging from 0.5% to 2.0%. However, due to the uncertainty surrounding the tariffs and their effect on its business, Walmart has refrained from offering a new forecast for the period.
Despite this, the company maintained its outlook for first-quarter sales growth, which it expects to be between 3% and 4%. Additionally, Walmart reaffirmed its full-year guidance, which anticipates net sales growth of 3% to 4%, and adjusted operating income growth of 3.5% to 5.5%. This forecast includes some headwinds from acquisitions and a leap year in 2024.
Walmart’s decision to withdraw its operating income forecast comes as the United States imposes significant tariffs on imports from key manufacturing hubs, including a 104% tariff on products from China and a 46% levy on goods from Vietnam. The tariffs, which took effect on Wednesday, are part of the broader trade conflict between the US and these countries.
The retailer explained that the tariffs may force it to increase investments in pricing in order to manage the potential cost increases, which could further complicate predictions for first-quarter operating income. Walmart also cited additional challenges, such as insurance-related expenses and a less favorable mix of merchandise, as contributing factors to the uncertainty.
During a two-day investor event in Dallas, Walmart’s CEO, Doug McMillon, acknowledged the company’s challenges and described the current retail environment as “fluid.” He emphasized that while the company cannot predict the full extent of the impact from tariffs, it remains focused on its priorities of maintaining low prices, managing inventory, and controlling expenses.
Walmart’s stock dropped by 1.8% in premarket trading on Wednesday, reflecting investor concerns over the company’s outlook. The retail giant is scheduled to report its first-quarter results on May 15, with analysts expecting a slight decline in earnings compared to the previous year.
CNBC and Market Watch contributed to this report.
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