The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

By Jennifer Saba

NEW YORK, April 9 (Reuters Breakingviews) - Walmart WMT.N CEO Doug McMillon is smiling, improbably, like the company’s yellow happy-face symbol. The $700 billion retailer clung to its annual financial forecasts despite rising U.S. tariffs and recession risks. The sheer number of unpredictable moving parts, however, blunts the reassurances.

During a presentation to investors on Wednesday, McMillon reaffirmed anticipated sales growth of 3% to 4% for the year ending on January 31, 2026. Although Walmart withdrew its first-quarter operating profit outlook partly to keep some pricing flexibility as import duties swing, it nevertheless still anticipates the figure to increase 3.5% to 5.5% during the fiscal 12-month stretch.

The confidence jars with the anxiety washing over consumers and investors from President Donald Trump’s escalating trade war. Even as McMillon and his team were speaking, China and the European Union retaliated by hiking duties on U.S. goods to 84% and 25%, respectively, before Trump said in a social media post that he would roll back U.S. tariffs on all countries, except China, to 10%. In a contrast to unflinching Walmart, Delta Air Lines DAL.N withdrew its full-year financial guidance on Wednesday morning, in what will probably be the more common refrain throughout the U.S. earnings season.

McMillon is leaning hard on a long-held promise to keep everyday prices low. Some 60% of U.S. sales come from groceries, meaning his superstores are better positioned for upheaval than rivals such as Target TGT.N, which rely more on apparel, electronics and furniture. Walmart’s e-commerce business also is getting stronger, with the U.S. arm on track to be profitable this year. Advertising revenue has been rising, too.

Chief Financial Officer John Rainey said despite signs that consumers are getting nervous, there is “nothing that changes our view.” Walmart flexed its muscles during the global financial crisis, generating some of its strongest growth in two decades. It also navigated supply-chain disruptions during the pandemic. And yet it’s hard not to be nagged by everything that’s in flux.

Marketing budgets are usually the first to be slashed in an economic downturn. Despite Walmart’s clout, it will struggle to push all the extra costs back onto overseas manufacturers. Some goods too expensive to buy from China may be impossible to source elsewhere. And even if the chain can remain a comparative favorite for shoppers, it’s hard at this stage to return McMillon’s smile.

Follow @jennifersaba on X

CONTEXT NEWS

Walmart on April 9 reaffirmed its expectations of 3% to 4% sales growth in 2025 and a 3.5% to 5.5% increase in operating income.

For the first quarter ending April 30, Walmart kept its guidance of 3% to 4% sales growth, but it withdrew its outlook for a 0.5% to 2% rise in operating income because of a change in the mix of what shoppers are buying and to keep some pricing flexibility as U.S. tariffs are rolled out.

(Editing by Jeffrey Goldfarb and Pranav Kiran)

((For previous columns by the author, Reuters customers can click on SABA/jennifer.saba@thomsonreuters.com))