Walmart Warns Tariffs Could Squeeze Profits Despite Strong Sales Outlook
Walmart is bracing for a potential hit to its profits—even if it achieves its 3–4% sales growth target for fiscal 2026. CFO John David Rainey said Thursday that while the company feels confident about growing revenue, a return to steep U.S. tariffs could disrupt its earnings outlook.
The retail giant expects earnings per share to land between $2.50 and $2.60, but Rainey warned that higher import taxes could “significantly” impact margins and threaten year-over-year earnings growth.
This concern isn’t isolated. Several retailers—including Under Armour, American Eagle Outfitters, and On Holdings—are also factoring tariff risks into their cautious forecasts. Some, like Under Armour and AEO, chose not to issue full-year guidance at all.
Walmart, however, is trying to shield consumers from price hikes, especially in grocery aisles. Executives said the company will continue to prioritize affordability in food, even though avoiding price increases entirely may be unrealistic.
Spending habits have already shifted. Customers are focusing more on essentials like groceries and pulling back on discretionary items like electronics and home goods.
“The consumer is pressured,” Rainey said. “We’ve seen a continued shift in baskets away from general merchandise to necessities.”
Walmart is bracing for a potential hit to its profits—even if it achieves its 3–4% sales growth target for fiscal 2026. CFO John David Rainey said Thursday that while the company feels confident about growing revenue, a return to steep U.S. tariffs could disrupt its earnings outlook.
The retail giant expects earnings per share to land between $2.50 and $2.60, but Rainey warned that higher import taxes could “significantly” impact margins and threaten year-over-year earnings growth.
This concern isn’t isolated. Several retailers—including Under Armour, American Eagle Outfitters, and On Holdings—are also factoring tariff risks into their cautious forecasts. Some, like Under Armour and AEO, chose not to issue full-year guidance at all.
Walmart, however, is trying to shield consumers from price hikes, especially in grocery aisles. Executives said the company will continue to prioritize affordability in food, even though avoiding price increases entirely may be unrealistic.
Spending habits have already shifted. Customers are focusing more on essentials like groceries and pulling back on discretionary items like electronics and home goods.
“The consumer is pressured,” Rainey said. “We’ve seen a continued shift in baskets away from general merchandise to necessities.”