Walmart says "everything is fine"

Scary headlines about the consumer giant belie the calm waters below

Apologies for the late delivery . . . had a weekend full of family commitments, and this needed a little clean up this morning.

• Walmart says “everything is fine,” and the crowd goes wild hushed silence

• Walmart’s Amazon playbook is working great

• If there’s one underappreciated thing, it’s the e-commerce at the molten core, but remember that Breaking Up With China Is Hard To Do

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Walmart says “everything is fine”

When Walmart speaks, we listen.

Walmart has fed, clothed, and supplied more people than probably anyone in history, and so when Walmart offers its view of the Almighty Consumer, it’s very much worth attending to.

Well, last week, Walmart reported strong results, as usual, but the hivemind collectively declared some version of “Walmart warns of impending doom.”

To be fair, Walmart did offer a somewhat cautionary outlook (more on that below), but queue the clickbait:

• Walmart’s tepid outlook stirs concern for retail earnings ahead (Bloomberg)

• Walmart warns of a slower 2025. That’s a bad sign for America’s economy (CNN)

• Walmart shares fall on disappointing forecast, fueling US spending worries (Guardian)

• Walmart racks up sales record, but sees slower growth ahead (NYT)

• Walmart points to ‘uncertain time’ with warning of weaker sales growth (FT)

So, Walmart is clanging the warning bells because it expects 2026 to be “tepid” “slow” “disappointing” and/or “uncertain.”

Once you read past the headlines, however, the reality is that very little new information entered the picture.

Offering something for everyone

Yes, the lower-income consumer is looking a bit stretched, yes, Walmart is making gains among all households, but higher-income households, especially, and yes, everyone is being a bit more discerning.

FY25 Q4

. . . and e-commerce (and advertising) continue to grow.

In other words, Walmart is reaffirming what Random Walk (and Walmart) has been saying for about a year: the Almighty Cautious Consumer is the new normal (and also loves to shop online).

U.S. customers remain resilient, exhibiting behaviors that have been largely consistent over the past year.

As always, people are looking for value and they want to save time.

But because there is some “uncertainty,” Walmart is guiding a slightly cooler 2025. OK, alright.

In terms of what it means going forward, the answer is “nothing.” Or “nothing new and different.”¹ Wages in this country are growing a too-hot 4%. Europe and China have problems of their own. Is Walmart really going to guide 5-6%? Nah.

If people are just waking up now to the distinct possibility of the middling middle, I don’t know what to say. Read more Random Walk, I guess, but this is not new information. And it certainly has nothing to do with the new administration, or the old administration, for that matter.

It’s just not that exciting to be an aging, healthcare-driven economy, up to its ears in debt.²

We’re going to have to take our medicine, one way or another, I’m sorry to say. That doesn’t have to include catastrophe, but if there’s going to be some massive reacceleration, where does it come from (and so why be disappointed when it’s not promised)?

Walmart too is riding a wave of cheap Chinese ecommerce

Now, if there’s one thing about consumers that is perhaps not fully appreciated, is the extent to which buying cheap tchotchkes on the internet (from China) is at the beating heart of retail sales.

Walmart is no different in that regard, and perhaps some of the headwinds they anticipate are specific to their fast-growing e-commerce sales (where tariffs may make the tchotchkes less cheap).

3rd party platform sales, and advertising, are two nice, high-margin businesses, straight outta Amazon’s playbook.

And much like Amazon, Walmart made a big push to get third-party sellers on its platform, and it’s now paying dividends.