Stock prices plummet! Falling is Walmart, worrying is the U.S. economy

Walmart's revenue reached a record high last year, but it warned that growth will slow this year, reflecting not only the challenges faced by Walmart itself but also the uncertainty of the U.S. economy.

On Thursday, Walmart reported strong performance for fiscal year 2024. According to the financial report, the company's annual revenue reached $681 billion, a year-on-year increase of 5.1%, setting a record for global enterprises; operating profit grew by 8.6%, close to the lower limit of management's previous guidance.

However, Walmart's guidance for fiscal year 2025 disappointed investors. Walmart expects net revenue growth of 3-4% and adjusted operating profit growth of 3.5-5.5% for fiscal year 2025, which is lower than last year's growth rate and significantly below Wall Street analysts' expectations.

According to a survey by Visible Alpha, analysts had previously expected Walmart's revenue growth for fiscal year 2025 to be 4.2%, with operating profit growth exceeding 11%.

Due to the pessimistic guidance, Walmart's stock price plummeted 6.5% on Thursday, marking the largest single-day decline in 15 months. Over the past year, Walmart's stock price has surged over 60%, as the company is known for its ultra-low prices, attracting consumers amid persistent inflation in the U.S.

A Warning from the U.S. Consumer Spending Barometer

Walmart's Chief Financial Officer John David Rainey stated during a conference call that Walmart's outlook "assumes a relatively stable macroeconomic environment," but "acknowledges that there are still uncertainties related to consumer behavior and global economic and geopolitical conditions."

Walmart indicated that as consumers become increasingly frustrated with inflation and concerned about the Trump tax, the situation in 2025 will be more challenging. Walmart stated that it must deal with tariff issues and other challenges.

In addition to tariffs, Trump's threat to deport millions of immigrants could reduce the number of customers in Walmart stores and workers in the supply chain.

Walmart is the largest retailer in the U.S. and a barometer of consumer spending, and the slowdown in growth guidance serves as a warning for other retailers.

David Silverman, a senior director at Fitch Ratings, stated that given the recent decline in consumer confidence (especially among lower-income consumers) and the impact of tariffs, "retail volatility will continue into 2025."

Walmart will be able to handle tariff issues better than most companies because it can leverage its scale to pressure suppliers to lower prices. Economists say that smaller companies do not have as much leverage and may have to raise prices for consumers.

Americans have already shown signs of concern about the economy. According to media polls, a majority of adults nationwide (62%) believe that Trump has not done enough to lower the prices of everyday goods