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Ahead of its Investment Community Meeting, Walmart (WMT) eased investors' intensifying tariff-related concerns, reaffirming its 1Q26 sales growth guidance of 3-4% and reiterating its annual sales and operating income growth outlook, which had called for growth of 3-4% and 3.5-5.5%, respectively. WMT did pull its Q1 operating income forecast, however, stating that the range of outcomes has widened due to less favorable category mix and a desire to maintain flexibility to invest in price as tariffs are implemented.

Still, WMT believes it is well-positioned to weather this storm, with CEO John Rainey commenting that the company typically gains market share during economic downturns, thanks to its low-price competitive edge.

• Even at the expense of short-term profits, investing in price to maintain affordability remains a key tenet of WMT's strategy. WMT's efforts to shift and diversify its supply chain will help to mitigate the damage from tariffs. Currently, WMT sources approximately 60% of its products from China, which now faces the stiffest tariffs with a 104% duty charged on Chinese imports. In prior years, China accounted for about 80% of WMT's products. WMT has turned to countries such as India, Vietnam, and Mexico to source more of its products.
• In addition to a more diverse and efficient supply chain, WMT is focused on expanding its e-Commerce channel to drive higher margins and profits. The company's investments are paying off here, as illustrated by its healthy U.S. e-Commerce growth rates over the past four quarters: +20% in 4Q25, +22% in 3Q25, +22% in 2Q25, and +17% in 1Q25.
• Mr. Rainey's statement about WMT becoming stronger during economic downturns rings true when looking at the company's financial performance during the pandemic. For instance, in FY21, U.S. comparable sales grew by a robust 8.6% while EPS increased by 9%. During this period, WMT gained market share across multiple categories, including groceries and household essentials, as higher-income shoppers turned to value retailers for affordability.
• The same scenario is now unfolding for WMT. In fact, in 4Q25, households earning over $100,000 annually accounted for 75% of the company's market share gains. WMT also credited high-income shoppers for contributing to the 20% increase in U.S. e-Commerce sales last quarter as this group utilized services like curbside pickup and fast home deliveries.

WMT's reaffirmation of Q1 sales growth guidance and its FY26 sales and operating income growth outlook has put the retailer's resilience and stability under the spotlight. Similar to past economic downturns, the company is well-positioned to emerge as a winner in the retail space, driven by its steadfast goal of maintaining affordability, a more diverse supply chain, and e-Commerce expansion.