Walmart warns of a slower 2025. That’s a bad sign for America’s economy – CNN
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During America’s inflation crisis, shoppers have flooded to Walmart for groceries and clothing, looking for good deals on all manner of essentials. But Walmart said Thursday 2025 will be trickier as consumers grow increasingly frustrated with inflation and concerned about President Donald Trump’s tariffs.
Walmart warned Thursday that its sales and profit growth will slow this year. The forecast sent its stock tumbling around 6% during early trading. It also dragged down the Dow, which fell more than 1%.
To be sure, Walmart’s business remains relatively strong and consumers are “resilient,” the company said. Walmart said sales will grow by up to 4% this year and profit will grow up to 5.5%. But that was short of investor expectations.
Walmart (WMT) is the largest retailer in the United States and a bellwether for consumer spending. Its projected slowdown is a signal for the rest of the retail industry that 2025 will be a rockier year.
David Silverman, a senior director at Fitch Ratings, expects “retail choppiness to continue in 2025,” given a recent dip in consumer sentiment, particularly for lower-end consumers and tariffs, he said in a note to clients Thursday.
Customers making more than $100,000 a year looking to save on groceries have fueled the growth at Walmart in recent years. Walmart has also built a strong online operation to rival Amazon. It has added the option to buy online and pickup in store to thousands of its locations and Walmart+, a same-day grocery delivery membership program.
But Walmart acknowledged it will have to navigate tariffs and manage other challenges.
Trump recently enacted a 10% across-board-tariff on goods coming from China and 25% tariffs on all steel and aluminum imports. Trump has paused tariffs on Mexico and Canada until March and also pledged to impose “reciprocal tariffs.”
Walmart’s outlook “assumes a relatively stable macroeconomic environment” but “acknowledges that there are still uncertainties related to consumer behavior and global economic and geopolitical conditions,” Walmart finance chief John David Rainey said on a call with analysts.
Walmart will be able to handle tariffs better than most companies because it can apply its size and scale to muscle down prices with suppliers. Smaller companies have less leverage and may have to raise prices for consumers, economists say.
Still, in an interview with CNBC, Rainey said Walmart “is not going to be completely immune” from tariffs.
Americans are showing signs of concern about the economy. Most adults nationwide, 62%, feel President Donald Trump has not gone far enough in trying to reduce the price of everyday goods, according to new CNN polling.
Consumer prices rose 0.5% last month from December — the fastest pace in more than a year — as energy and food costs continued to bite. Egg prices have soared as a result of a deadly avian flu.
Walmart said that it expects normal inflation this year of 1% to 2%, despite the rise in egg prices.
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Source: https://www.cnn.com/2025/02/20/business/walmart-stock-earnings/index.html
