Walmart is warning of slower sales growth for 2025, as consumers grow increasingly frustrated with inflation and concerned about President Donald Trump’s tariffs. The forecast sent the company’s stock tumbling by 6% during early trading.
Despite its strong business, Walmart expects to see a slowdown in sales and profit growth this year, with projections of up to 4% sales growth and 5.5% profit growth. This is short of investor expectations.
The retail industry as a whole may face challenges in 2025, with many experts predicting “retail choppiness” due to recent dips in consumer sentiment, particularly for lower-end consumers. Tariffs imposed by President Trump on goods from China and other countries are also expected to impact the industry.
However, Walmart believes its size and scale will allow it to better navigate tariffs and manage prices. The company has a strong online operation and a membership program that provides same-day grocery delivery, which has helped drive growth in recent years.
The outlook for consumer prices remains uncertain, with energy and food costs continuing to rise. However, Walmart expects normal inflation of 1% to 2% this year, despite rising egg prices. The company’s finance chief said it will be able to handle tariffs better than most companies due to its size and scale.
Despite the challenges ahead, Walmart is confident that its business remains relatively strong and consumers are resilient. However, the forecast sent a warning signal for the rest of the retail industry, which may face a rockier year in 2025.
Source: https://edition.cnn.com/2025/02/20/business/walmart-stock-earnings/index.html