Walmart sees an opportunity in Trump’s trade war
A Walmart store in American Canyon
By Nathaniel Meyersohn, CNN
New York (CNN) — Walmart, the largest retailer in the world, pulled its financial guidance for the quarter because of uncertainty over the impact of sweeping tariffs on China, Vietnam and other global sources of goods.
Walmart said Wednesday it was unsure of its operating profit for the first quarter of the year because the retailer wanted to “maintain flexibility” to invest in lowering prices as tariffs kick in.
President Donald Trump instituted 10% tariffs across all countries last Saturday. China, however, will face higher tariffs at a rate of 125%.
Still, Walmart maintained that sales during the quarter will grow by up to 4%, and Walmart reaffirmed its full-year sales and profit guidance. Walmart expects sales to grow by up to 4% for the year.
Walmart said it was confident it would be able to navigate tariffs and the growing possibility of a recession.
“We see opportunities to accelerate share gains while maintaining flexibility to invest in price as tariffs are applied to incoming goods,” Walmart finance chief John David Rainey said Wednesday.
Walmart’s stock gained 3% during early trading Wednesday, a sign that investors believe Walmart is better positioned than most companies to handle tariffs.
Analysts say that Walmart can use its enormous scale and wide supplier base to keep prices down for customers, even as tariffs raise its costs. This could help Walmart gain market share against competitors.
“Walmart is leaning into its scale advantage, tech capabilities, and supply chain prowess to lead at a time of heightened uncertainty,” Greg Melich, an analyst at Evercore ISI, said in a note to clients Wednesday.
Although Walmart is not immune from pressure, the retailer will “manage through volatility better than most,” Melich said. “The company is well positioned to navigate a volatile consumer and geopolitical environment.”
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