Walmart (WMT) appears to have recently been resonating well with consumers across the country during a time when inflation and higher living costs are adding strain to shoppers’ wallets.
The retail giant’s fourth-quarter earnings report for 2024 revealed that its revenue increased by about 4% year over year during the holiday season.
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Walmart’s comparable sales in the U.S. also spiked by 4.6%, compared to the 4% increase it faced during the same period last year. The retailer highlighted that its comparable sales growth was led by higher consumer transactions and more profit from upper-income shoppers.
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The average amount of money shoppers spent per purchase in the region increased by 1.8% during the quarter.
As Walmart attracted more shoppers during the bustling holiday season, the company’s U.S. operating income, which is its profit after expenses, rose by 7.4% year over year.
Walmart shares grim outlook on future sales
Despite increasing consumer momentum, Walmart has a grim prediction about its performance for 2025.
The earnings report revealed that it expects its net sales this year to only increase by 3% to 4% and its operating income to rise by 3.5% to 5.5%, falling short of investor expectations.
During an earnings call on Feb. 20, Walmart Chief Financial Officer John Rainey said that the company’s weaker guidance is based on its acknowledgment that it is operating during “an uncertain time.”
“Our outlook assumes a relatively stable macroeconomic environment, but acknowledges that there are still uncertainties related to consumer behavior and global economic and geopolitical conditions,” said Rainey during the call. “As a result, we’ve taken a similar approach to our initial guidance for you for the year as we have in the past couple of years, balancing known risk with what we can control.”
Walmart’s stock declined by 6% on Feb. 20, shortly after it unveiled its performance forecast for the year.
Walmart’s future sales face two major threats
Walmart’s weaker-than-expected performance outlook for the year comes after President Donald Trump imposed a 10% tariff on all goods imported from China. In response, China imposed tariffs on several American imports.
Tariffs are taxes companies pay to import goods from overseas, and the extra cost is often passed down to consumers.
Trump also threatened to impose 25% tariffs on all goods from Mexico and Canada on Feb. 4, but he agreed to delay this decision for 30 days.
Related: Walmart, Amazon face massive boycott threat
In an interview with CNBC in November, Rainey warned that Walmart may have to raise its prices due to tariffs. This move could drive away low-income customers.
“We never want to raise prices,” he said in the interview. “Our model is everyday low prices. But there probably will be cases where prices will go up for consumers.”
However, during Thursday’s earnings call, Rainey said that Walmart will continue to sharpen its focus on lowering prices despite recent challenges.
“Our focus on bringing down pricing through rollbacks continues despite pockets of food inflation in areas like eggs, bacon and ground beef,” said Rainey during the call.
Walmart’s surprising 2025 outlook also comes during a time when it facing a major boycott threat from consumers, which can negatively impact its sales.
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On Feb. 28, consumers are planning to boycott large retailers for 24 hours to protest the scaling back and elimination of DEI policies in corporate America and to take a stance against corruption in multiple industries. Some of the retailers being targeted include Walmart, Amazon and Target.
The protest is being heavily promoted by The People’s Union, which dubbed the boycott an “economic blackout.”
The union has also planned an additional Walmart boycott between April 7-14.
“A 24-hour blackout is just the first step; it’s a test,” said the group’s founder, John Schwarz, in a recent Instagram video. “If enough of us participate, they will feel it. If they don’t listen, we escalate. The next one will last for three days. The next one will target specific industries. The next one forces them to respond. And this is not just a boycott, this is economic warfare.”
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