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Key Takeaways

• Walmart CFO John David Rainey said more significant tariffs may impair the retailer's profit trajectory even if it hits its sales goals.

• Tariffs are also impacting how retailers, such as Under Armour, American Eagle Outfitters and On Holdings, approach issuing guidance.

• Despite import taxes, Walmart wants to limit price increases, particularly in the grocery aisles, executives said.

Higher tariffs could jeopardize Walmart’s profits in the year ahead even if the retail giant hits its sales goals, executives said Thursday.

Walmart (WMT) said it anticipates sales rising 3% to 4% in its 2026 fiscal year, climbing from the $674.5 billion recorded in fiscal 2025. That might translate to about $2.50 to $2.60 in earnings per share (EPS)—analysts polled by Visible Alpha are looking for a result at the high end of that range—but CFO John David Rainey cautioned that higher tariffs may complicate this trajectory.

The forecast assumes the U.S. will reach trade deals with other countries and avoid reinstating the “reciprocal” tariffs briefly enacted in early April, Rainey said during an earnings conference call Thursday. The company is "comfortable with our ability to grow sales," Rainey said.

“If we see restoration of dramatically higher tariff levels, the impact on our financials could be significant and even jeopardize our ability to grow earnings year-over-year,” Rainey said, according to a transcript made available from AlphaSense.

Tariffs have shaped how several companies described their outlook this week. On Holdings (ONON), said it expects greater growth in full-year sales, but its gross profit margin may dip and its adjusted EBITDA may be lower than previously expected. Apparel companies, including Under Armour (UA, UAA) and American Eagle Outfitters (AEO), didn’t provide full-year guidance.

Amid the uncertainty, Walmart wants to limit price increases, particularly in the grocery section, executives said—though avoiding higher prices completely likely isn't possible. The chain’s food aisles have gained traction as prices crept up in recent years and Americans sought ways to save, they said.

While spending more on food, people are cutting back on general merchandise, Rainey said, leaving Walmart with softer electronics, sporting merchandise and home goods sales.

“The consumer is pressured,” he said. “We’ve seen for a couple of years now a shift in baskets away from general merchandise to those items that are more necessities.”

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