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Yahoo
14-05-2025
- Business
- Yahoo
How Walmart handles Trump's tariffs could offer clues on retail health
By Ananya Mariam Rajesh (Reuters) - Results from Walmart, a bellwether for the U.S. retail industry, will offer proof on Thursday why the Arkansas behemoth is best placed to navigate the uncertainty from the Trump administration's tariffs. Walmart is among a handful of large companies that has not either pulled or slashed its forecast. The company last month reaffirmed its annual forecast, saying "nothing in the current environment changes its strategy". Since the announcement was made minutes before U.S. imposed a 145% tariff on China - Walmart's largest supplier - investors will watch for any adjustment to the outlook and whether it absorbs any tariff-related costs or passes them on to customers. The world's largest retailer has promised to keep prices low to keep its price advantage over competitors. its fiercest rival, is also "maniacally focused" on lower prices and has encouraged sellers to move more inventory to the U.S. before tariffs take effect. "Many consumers are prioritizing saving money and stretching their dollar a little bit further," Jefferies analyst Corey Tarlowe said. "They're prioritizing what they need over what they want. So they're trading into value-oriented to me paints a very clear picture that's conducive to success for Walmart." With the U.S. and China pausing trade escalations on Monday, retailers including Walmart have had to deal with a month of elevated tariffs. Many stopped shipments from China and reached into their inventories to stock shelves. Rival Target, unlike Walmart, expects annual sales to be flat and tariffs to weigh on its results. It reports on May 21. Walmart said in February it expects profit growth to slow this year even as sales rise. It forecast adjusted earnings per share for the fiscal year ending January 2026 in the range of $2.50 to $2.60, and sales growth of 3% to 4%. At that time, Trump had imposed 10% tariffs on goods from China and 25% on goods from Mexico and Canada. "Walmart should be able to effectively manage the increase in tariffs, given its strong global sourcing operation, healthy vendor relationships, and defensive product mix," Telsey Advisory Group analyst Joseph Feldman said. "Sales should be pretty solid and it feels like investors feel confident that Walmart will execute and operate in this environment." Its U.S. e-commerce business will be in focus as the company has said the division will achieve profitability for the first time in the first quarter. The business has seen double-digit growth for 11 straight quarters in the U.S. and clocked 16% growth globally in the fourth quarter. It accounts for just under a fifth of Walmart's annual revenue. The company's paid membership program, Walmart+, is of interest for investors who want to see if it is taking customers away from rivals Amazon and Costco. Walmart's stock has been on a tear over the past year, rising 60% to take its market value above $700 billion, and outperforming six of the so-called Magnificent Seven tech companies that led the market rally in 2023 and 2024. Only Tesla has performed better. For the first quarter, analysts polled by LSEG expect Walmart net sales to increase 2.7% to $165.88 billion and net income to fall 9% to $4.64 billion. "(Walmart's) more favorable positioning relative to the rest of retail will probably become even more evident as the year unfolds, when the operating environment could become much more challenging," UBS analysts said in a research note.
Yahoo
14-05-2025
- Business
- Yahoo
How Walmart handles Trump's tariffs could offer clues on retail health
By Ananya Mariam Rajesh (Reuters) - Results from Walmart, a bellwether for the U.S. retail industry, will offer proof on Thursday why the Arkansas behemoth is best placed to navigate the uncertainty from the Trump administration's tariffs. Walmart is among a handful of large companies that has not either pulled or slashed its forecast. The company last month reaffirmed its annual forecast, saying "nothing in the current environment changes its strategy". Since the announcement was made minutes before U.S. imposed a 145% tariff on China - Walmart's largest supplier - investors will watch for any adjustment to the outlook and whether it absorbs any tariff-related costs or passes them on to customers. The world's largest retailer has promised to keep prices low to keep its price advantage over competitors. its fiercest rival, is also "maniacally focused" on lower prices and has encouraged sellers to move more inventory to the U.S. before tariffs take effect. "Many consumers are prioritizing saving money and stretching their dollar a little bit further," Jefferies analyst Corey Tarlowe said. "They're prioritizing what they need over what they want. So they're trading into value-oriented to me paints a very clear picture that's conducive to success for Walmart." With the U.S. and China pausing trade escalations on Monday, retailers including Walmart have had to deal with a month of elevated tariffs. Many stopped shipments from China and reached into their inventories to stock shelves. Rival Target, unlike Walmart, expects annual sales to be flat and tariffs to weigh on its results. It reports on May 21. Walmart said in February it expects profit growth to slow this year even as sales rise. It forecast adjusted earnings per share for the fiscal year ending January 2026 in the range of $2.50 to $2.60, and sales growth of 3% to 4%. At that time, Trump had imposed 10% tariffs on goods from China and 25% on goods from Mexico and Canada. "Walmart should be able to effectively manage the increase in tariffs, given its strong global sourcing operation, healthy vendor relationships, and defensive product mix," Telsey Advisory Group analyst Joseph Feldman said. "Sales should be pretty solid and it feels like investors feel confident that Walmart will execute and operate in this environment." Its U.S. e-commerce business will be in focus as the company has said the division will achieve profitability for the first time in the first quarter. The business has seen double-digit growth for 11 straight quarters in the U.S. and clocked 16% growth globally in the fourth quarter. It accounts for just under a fifth of Walmart's annual revenue. The company's paid membership program, Walmart+, is of interest for investors who want to see if it is taking customers away from rivals Amazon and Costco. Walmart's stock has been on a tear over the past year, rising 60% to take its market value above $700 billion, and outperforming six of the so-called Magnificent Seven tech companies that led the market rally in 2023 and 2024. Only Tesla has performed better. For the first quarter, analysts polled by LSEG expect Walmart net sales to increase 2.7% to $165.88 billion and net income to fall 9% to $4.64 billion. "(Walmart's) more favorable positioning relative to the rest of retail will probably become even more evident as the year unfolds, when the operating environment could become much more challenging," UBS analysts said in a research note. Sign in to access your portfolio
Yahoo
14-05-2025
- Business
- Yahoo
How Walmart handles Trump's tariffs could offer clues on retail health
By Ananya Mariam Rajesh (Reuters) - Results from Walmart, a bellwether for the U.S. retail industry, will offer proof on Thursday why the Arkansas behemoth is best placed to navigate the uncertainty from the Trump administration's tariffs. Walmart is among a handful of large companies that has not either pulled or slashed its forecast. The company last month reaffirmed its annual forecast, saying "nothing in the current environment changes its strategy". Since the announcement was made minutes before U.S. imposed a 145% tariff on China - Walmart's largest supplier - investors will watch for any adjustment to the outlook and whether it absorbs any tariff-related costs or passes them on to customers. The world's largest retailer has promised to keep prices low to keep its price advantage over competitors. its fiercest rival, is also "maniacally focused" on lower prices and has encouraged sellers to move more inventory to the U.S. before tariffs take effect. "Many consumers are prioritizing saving money and stretching their dollar a little bit further," Jefferies analyst Corey Tarlowe said. "They're prioritizing what they need over what they want. So they're trading into value-oriented to me paints a very clear picture that's conducive to success for Walmart." With the U.S. and China pausing trade escalations on Monday, retailers including Walmart have had to deal with a month of elevated tariffs. Many stopped shipments from China and reached into their inventories to stock shelves. Rival Target, unlike Walmart, expects annual sales to be flat and tariffs to weigh on its results. It reports on May 21. Walmart said in February it expects profit growth to slow this year even as sales rise. It forecast adjusted earnings per share for the fiscal year ending January 2026 in the range of $2.50 to $2.60, and sales growth of 3% to 4%. At that time, Trump had imposed 10% tariffs on goods from China and 25% on goods from Mexico and Canada. "Walmart should be able to effectively manage the increase in tariffs, given its strong global sourcing operation, healthy vendor relationships, and defensive product mix," Telsey Advisory Group analyst Joseph Feldman said. "Sales should be pretty solid and it feels like investors feel confident that Walmart will execute and operate in this environment." Its U.S. e-commerce business will be in focus as the company has said the division will achieve profitability for the first time in the first quarter. The business has seen double-digit growth for 11 straight quarters in the U.S. and clocked 16% growth globally in the fourth quarter. It accounts for just under a fifth of Walmart's annual revenue. The company's paid membership program, Walmart+, is of interest for investors who want to see if it is taking customers away from rivals Amazon and Costco. Walmart's stock has been on a tear over the past year, rising 60% to take its market value above $700 billion, and outperforming six of the so-called Magnificent Seven tech companies that led the market rally in 2023 and 2024. Only Tesla has performed better. For the first quarter, analysts polled by LSEG expect Walmart net sales to increase 2.7% to $165.88 billion and net income to fall 9% to $4.64 billion. "(Walmart's) more favorable positioning relative to the rest of retail will probably become even more evident as the year unfolds, when the operating environment could become much more challenging," UBS analysts said in a research note. Sign in to access your portfolio
Yahoo
06-05-2025
- Business
- Yahoo
WK Kellogg cuts annual sales, profit forecasts on softening packaged food demand
(Reuters) -WK Kellogg cut its annual organic sales and core profit forecasts on Tuesday after weaker consumer spending on its higher-priced products including Frosted Flakes and Apple Jacks cereals. Shares of the Battle Creek, Michigan-based company fell nearly 3% in premarket trading after it missed first-quarter sales and profit expectations. Customers are bracing for another inflationary market burdened by price increases as companies try to navigate higher input costs brought on by U.S. President Donald Trump's erratic tariff implementation. WK Kellogg has already witnessed pushback from consumers after it ramped up prices over the last several quarters to counter input costs, pushing cost-conscious shoppers away. Its product pricing rose 3%, while volumes slumped 8.6% in the reported quarter. Kraft Heinz and Kellanova have also reported bleak quarterly results, given subdued consumer spending in the United States. The U.S. economy contracted for the first time in three years in the first quarter, hit by a flood of imports as businesses raced to avoid higher costs from tariffs, as well as softening consumer spending. WK Kellogg expects full-year organic net sales to now decrease between 2% and 3%, compared with a prior expectation of a 1% fall. It expects full-year net adjusted EBITDA, or earnings before interest, tax, depreciation and amortization, between $270 million and $275 million, compared with a previous expectation of between $286 million and $292 million. The Froot Loops maker said its 2025 outlook includes a modest impact from tariffs, primarily related to sourcing raw materials outside North America. WK Kellogg's quarterly net sales fell 6.2% to $663 million, compared with analysts' average expectation of $679.5 million, according to data compiled by LSEG. It reported earnings of 20 cents per share, missing analysts' estimate of 40 cents per share. (Reporting by Ananya Mariam Rajesh and Anuja Bharat Mistry in Bengaluru; Editing by Pooja Desai)
Business of Fashion
01-05-2025
- Business
- Business of Fashion
Estée Lauder Sales Slide 10%, Forecasts Bigger-Than-Expected Drop In Annual Sales
Cosmetics giant Estée Lauder forecast a bigger-than-expected drop in fiscal 2025 sales on Thursday, signalling slowdown in the American market and a longer road to recovery for demand in key China region. For the last couple of years, Estée has been struggling to revive demand, mainly in China and Asia travel retail as Chinese consumers navigate high unemployment and property downturn. It has also seen demand softening in the American beauty market. Its woes are further aggravated by US President Donald Trump's chaotic implementation of tariffs, which are likely to push up costs for major American firms that import their products particularly from China and Europe. Estée now expects net sales for fiscal 2025 to be down 8 percent to 9 percent, compared with analysts' estimate of a 7.07 percent fall, according to data compiled by LSEG. The MAC lipstick maker's net sales fell 10 percent to $3.55 billion during the period. Analysts on an average estimated a fall of 10.72 percent to $3.52 billion. Shares of Estée were up 3 percent in premarket trading. By Ananya Mariam Rajesh; Editor: Shilpi Majumdar Learn more: The Debrief | Can Estée Lauder Win Over the Modern Beauty Consumer? As the beauty conglomerate struggles with falling sales and rising competition, new CEO Stéphane de La Faverie is implementing a strategic overhaul to modernise the company.
