Walmart, one of America’s biggest retailers and a key indicator of the health of the U.S. consumer market, is set to release its latest earnings report on Thursday. All eyes are on the company as it navigates a challenging economic environment shaped by high tariffs and shifting consumer behavior. Despite the pressures, Walmart remains confident in its strategy, standing apart from rivals who have cut their forecasts or warned of lower profits.
Walmart’s Steady Strategy Stands Out
While many retailers have expressed concerns about the impact of tariffs imposed by the Trump administration, Walmart has maintained its full-year forecast. In a statement last month, the company said that nothing in the current climate has changed its long-term approach.
This reassurance came shortly before the U.S. imposed a hefty 145% tariff on Chinese imports — a significant development, as China remains Walmart’s largest supplier. Investors will be watching closely to see if the company adjusts its outlook or reveals whether it plans to absorb these costs or pass them on to customers.
Low Prices Remain a Top Priority
Walmart has emphasized that it will continue to focus on keeping prices low. This strategy is central to maintaining its competitive edge against rivals, particularly Amazon, which is also focused on offering low prices. Amazon has reportedly encouraged its sellers to move products into the U.S. ahead of tariff hikes to avoid added costs.
Consumers are clearly responding to these pricing strategies. “Many shoppers are choosing to save more and prioritize essentials over non-essentials,” said Jefferies analyst Corey Tarlowe. “They’re turning to value-focused retailers, and that bodes well for Walmart.”
Navigating Trade Tensions
Even though trade tensions between the U.S. and China have eased somewhat following a recent pause in escalation, retailers like Walmart have already faced a month of higher tariffs. To cope, many companies temporarily stopped shipments from China and relied on existing inventory to keep shelves stocked.
Walmart’s main competitor, Target, has taken a more cautious view. It expects flat annual sales and has warned that tariffs will impact its results. Target is set to report earnings on May 21.
Profit Growth to Slow, But Sales Expected to Rise
Earlier this year, Walmart projected slower profit growth, even as overall sales are expected to increase. The company forecast earnings per share between $2.50 and $2.60 for the fiscal year ending in January 2026, along with sales growth of 3% to 4%.
At the time, the U.S. had imposed 10% tariffs on Chinese goods and 25% on imports from Mexico and Canada. Despite these headwinds, analysts believe Walmart is well-positioned to manage the impact.
“Walmart has strong global sourcing, reliable vendor relationships, and a defensive product mix,” said Joseph Feldman of Telsey Advisory Group. “Sales should remain solid, and investors trust the company to perform in this environment.”
E-Commerce Gains in the Spotlight
Investors will be paying close attention to Walmart’s e-commerce business, which is expected to turn a profit for the first time in the first quarter. The digital business has seen double-digit growth in the U.S. for 11 straight quarters and grew 16% globally in the fourth quarter. It now contributes nearly one-fifth of Walmart’s annual revenue.
Walmart’s subscription service, Walmart+, is also under the spotlight. Analysts are watching closely to see if it’s attracting customers from competitors like Amazon and Costco.
Strong Market Performance
Walmart’s stock has been on a strong upward trend, gaining 60% over the past year. The rally has pushed its market value above $700 billion. It has outperformed most of the high-flying tech giants in the “Magnificent Seven” group that led the stock market in 2023 and 2024. Only Tesla has posted stronger returns during that time.
Expectations for Q1
For the first quarter, analysts surveyed by LSEG expect Walmart to report a 2.7% increase in net sales, reaching $165.88 billion. However, net income is projected to fall by 9% to $4.64 billion.
According to UBS analysts, Walmart’s strong position in the retail sector will likely become even more apparent as the year progresses. “As the environment gets tougher, Walmart’s ability to operate effectively will stand out even more,” they said in a recent note.
Summary
Walmart continues to show strength and confidence in an uncertain retail landscape. Its commitment to low prices, solid supply chain, and growing digital business are helping it stand apart from competitors. While tariffs and economic pressures remain, analysts and investors appear optimistic that Walmart is well-prepared to face the challenges ahead.
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