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In a surprising move, retail giant Walmart announced Wednesday that it is withdrawing its earnings and revenue guidance for the current fiscal year, citing uncertainty surrounding the Trump administration’s newly imposed tariffs on Chinese imports. The decision comes as the world’s largest retailer grapples with the potential impact of escalating trade tensions on its bottom line.
On Feb. 20, America’s largest retailer had called for net sales growth of 3%-4% and adjusted operating income growth of 3.5%-5.5% for fiscal year 2026.
The retraction of financial forecasts is a rare step for Walmart, known for its stable and predictable performance. This move underscores the far-reaching consequences of the ongoing trade dispute between the United States and China, which has sent shockwaves through global markets and supply chains.
Chief Financial Officer John David Rainey stated in a press release, “Given the fluidity of the current trade environment and the potential for further tariffs, we believe it’s prudent to withdraw our earnings guidance at this time.” He added that the company remains committed to providing updated forecasts as soon as it can reasonably assess the impact of the tariffs on its business.
Approximately two-thirds of the goods Walmart sells in the United States are grown, made or assembled in the U.S., with products of Chinese and Mexican origin dominating the remaining third.
The Trump administration’s tariffs on Chinese goods, which now cover a wide range of consumer products, pose a significant challenge for retailers like Walmart that rely heavily on imports from China. The tariffs are expected to increase costs for many everyday items, potentially forcing retailers to either absorb these costs or pass them on to consumers through higher prices.
Interestingly, the tariffs may also have unintended consequences for some of Walmart’s competitors, particularly emerging e-commerce players like Temu and Shein. These companies, known for their ultra-low prices, have been rapidly gaining market share by sourcing products directly from Chinese manufacturers and selling them to U.S. consumers at steep discounts.
The new tariffs could level the playing field between Walmart and these upstart competitors. Temu and Shein may find it challenging to maintain their price advantage as the cost of importing goods from China rises. This could provide an opportunity for Walmart to reclaim some of the market share it has lost to these aggressive newcomers.
Despite the uncertainty surrounding specific earnings numbers, Walmart’s management team remains optimistic about the company’s ability to navigate these challenges and even grow its market share. CEO Doug McMillon emphasized the company’s scale and diversified supply chain as key advantages in weathering the storm.