Walmart cemented its position as America’s inflation shelter in 2024 with 4.1% sales growth to $180.55 billion, but dark clouds gather for 2025. Revised earnings forecasts now trail Wall Street estimates by up to 9.7%, signaling vulnerability to rising tariffs and spending cuts as consumers prioritize essentials over discretionary purchases.
The retail giant’s stock plunged 9% after projecting 2025 EPS between $2.50-$2.60 – far below the $2.77 consensus. While groceries (60% of U.S. sales) insulate it from China-dependent inventory risks, Trump’s escalating trade wars threaten core pricing advantages. “New tariffs carry bigger risks than during Trump’s first term,” warns economist Laura Fonseca.
We’re gaining market share with faster delivery and premium households, but inventory costs could destabilize our model if tariffs persist. - CEO Doug McMillon
Critical challenges for 2025 include:
- Slowing e-commerce growth (16% vs Q3’s 27%)
- Prime members reducing big-ticket purchases
- January retail sales dropping 6% year-over-year
Walmart’s U.S. comp sales growth also decelerated:
- Q4: 4.6% ↘ from Q3’s 5.3%
- Q2: 4.2%
- Q1: 3.8%
With 70% of GDP tied to consumer spending, Walmart’s fate hinges on balancing tariff impacts through supplier negotiations. Its 3-4% annual sales growth projection to $674 billion misses analyst targets by $34 billion, testing investor patience. While Walmart+ memberships and high-income adopters (over $100k households) provide buffers, prolonged inflation could force unpopular price hikes – the very scenario that propelled its 2024 success.
