Walmart, the world’s largest retailer, is sending a mixed message about its economic prospects. Despite posting strong sales during the holiday season and into January, the company has lowered its full-year growth forecast due to concerns over inflation weighing on consumers.
The $780 billion retailer reported a 4.6% increase in sales at U.S. stores open for at least a year, driven by wealthier shoppers seeking discounts. However, the company’s equity value fell 6% after it flagged potential worries about inflation.
Walmart’s caution is a sign that economic exuberance ushered in by President Donald Trump’s election victory is fading. The company’s stock has surged by 25% since Trump won the White House, surpassing Amazon’s valuation.
The bellwether of U.S. spending habits, Walmart’s ambivalence is significant. Analysts are now questioning the potential downside to economic growth from new Washington policies, including tariffs and deportations. If Walmart is getting skittish, fear will seep further into the pervasive sentiment of greed.
In a surprising move, Walmart adjusted its full-year forecast downward, expecting sales to rise between 3% and 4%. This marks a significant departure from analysts’ expectations and contributes to a loss of about $50 billion in market capitalization.
Source: https://www.reuters.com/breakingviews/walmart-drops-bag-fear-into-trolley-greed-2025-02-20