(Bloomberg) — Walmart Inc. ( WMT )executives are confident that the world’s largest retailer will reach its financial targets this year, despite tariff turbulence that’s sparking uncertainty in the world economy.
On Wednesday, Walmart said that it still sees net sales growing 3% to 4% this year. That forecast accounts for tariffs, unlike its previous outlook from February.
The company, which has historically performed well in economic downturns, plans to keep prices low. This means it could take a short-term financial hit to maintain a price advantage against competitors. The company widened the range of its outlook for operating income for this quarter, acknowledging that its actions may weigh on the bottom line, but didn’t provide new guidance.
Walmart shares rose as much as 11% in New York trading, the most since 2020, following an announcement by President Donald Trump that the US is pausing the implementation of higher tariffs for 90 days on countries that have refrained from taking retaliatory measures. The advance erased most of the stock’s year-to-date decline.
“We’re basically one week into this new environment. There’s not anything that we see right now that would say that we should give up on the year,” John David Rainey, Walmart’s chief financial officer, said during a meeting with analysts in Dallas on Wednesday. “We’ve got a lot of levers, and we’ll be pulling those and we’ll be managing through this.”
The Trump administration’s sweeping tariffs are threatening to increase prices on everything from spirits and apparel to electronics and cars, while abrupt changes and announcements have sparked sudden market gyrations. A market selloff last week wiped out trillions of dollars in global equity value and stoked concerns about a recession.
Walmart executives told reporters that the company hasn’t seen consumers hoard items, but there has been more spending volatility in recent months. The retailer’s merchants are thinking through the quantity of goods the company needs and how prices could change as a result of tariffs, they added.
While Walmart’s playbook will remain the same, “what’s different is the magnitude of what’s being discussed,” Chief Executive Officer Doug McMillon said.
“What we’ve tried to do inside the company with our team is to set a pretty clear list of priorities. At the top of the list is keep prices as low as we possibly can,” he said.
Walmart hasn’t recently canceled orders due to tariffs, executives added.
‘Pressure Points’
The modest shift in guidance for operating income points to “pressure points,” D.A. Davidson & Co. analyst Michael Baker wrote Wednesday in a research note.
“Walmart’s signal to invest in prices could be a strategy to gain share and grow shares, but could squeeze profit in the near term,” Baker said.
Earlier Wednesday, Delta Air Lines Inc. pulled its forecast due to uncertainty surrounding global trade. Delta, the first airline to report earnings this quarter, sowed caution with investors by saying revenue has “flat-lined” as confidence dims among consumers and businesses. The carrier plans to update its outlook later in the year as visibility improves.
Walmart is seen as a barometer for consumer sentiment due to its size and exposure to a broad swath of US shoppers. The company previously said it’s accustomed to tariffs and has a diverse supply chain with about two-thirds of items sourced in the US. Executives say they’ll work closely with vendors to keep prices low.
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