Delta, Walmart warn about consumer spending amid tariffs, inflation | Global News Avenue

More than just Walmart.

From a cent grocery shopper to A first-class traveler Seeing demand breakdown, resilient consumers have supported the U.S. economy over the years despite the extended inflation rate. In addition to high interest rates and durability inflationCEOs are now working on how to deal with new obstacles, such as heavy tariffs, Volkswagen government layoffs and deterioration Consumer sentiment.

In earnings calls and presentations from investors in recent weeks, retailers and other consumer-facing businesses warned that sales in the first quarter were softer than expected and that the rest of the year might be harder than Wall Street thought. Many executives blame unusually cool weather and “dynamic” macroeconomic environment, but early days of the president Donald TrumpThe second term brings new challenges – perhaps no challenge than trying to plan global business while its government transfers trade policy Depend on Hour.

Economists largely expect Trump New tariffs Commodities in China, Canada and Mexico will increase consumer prices and wet spending when inflation remains higher than the Fed’s target. In February, consumer confidence (which can help you show how much shoppers are willing to escape) sees The biggest decline since 2021. Separate consumer emotional measures for March Better than expected.

Another sign of air travel is. The industry, especially large international airlines, has been a highlight after the pandemic, Consumer Proof again and again Even in the face of the biggest jump inflation in more than four decades, they won’t give up on travel. However, this week, the CEOs of four U.S. airlines – Unity,,,,, American,,,,, delta and southwest – Say they see Slow down Required for this quarter. The U.S., Delta and Southwest cut their first-quarter forecasts.

Additionally, the job market has been the country’s economic glue in recent years, and it is showing Early signs of stress As job growth slows down and unemployment Check.

These trends have put cold water on a hot stock market and have sparked people’s attention Potential recessionsend the S&P 500 index Roll 10% Starting from a record high in February, although some basics have begun from Friday morning trading.

Now, as investors and executives are increasingly concerned about the impact of tariffs on consumer spending And, because of their high expectations for the government a few months ago, even the strongest companies were cautious as weaker companies became bigger and bigger.

Walmart, the de facto leader of retail High-income consumers. when Walmart releases fourth-quarter revenue Last month, its stock was warning that profit growth will be slower than expected in the next year. This is a rare warning sign for a company that tends to thrive in a weaker economy, suggesting it wants consumers to retreat from higher money discretionary goods in favor of milk and tissues for the next year.

“We don’t want to ski here,” Walmart finance chief John David Rainey told analysts while discussing the company’s prospects. “The cautious view is somewhat measured. ”

Ed Bastian Delta gas line – The most profitable American airlines get returns Large expenditure In recent years – Its tone has reached a similar tone after cutting its revenue and revenue forecasts for the first quarter. In an interview with CNBC’s “Closing the Bell” Bastian said consumer confidence has weakened, and both casual and commercial customers have withdrawn their reservations on bookings, which has led to it cutting guidance.

“Consumers in discretionary businesses don’t like uncertainty,” Bastian said. “While we do think it will be a time we go through, it’s also a time when we need to understand and get into calm waters.”

To be sure, it’s not just people booking trips, which has led airlines to cut their first-quarter forecasts. The issue has been compounded by air safety issues following two major aviation accidents, including the Delta’s own crash Torontono one died in it.

Competitor United, outside Delta, said it will retire 21 aircraft as soon as possible, a move aimed at cutting costs.

“We’re also seeing a weaker market in demand,” Kirby said at the JPMorgan Chase aviation industry conference on Tuesday. “This is starting with the government. The government is 2% of our business. The government is close to, and all the other consultants and contracts that accompany it may be 2% to 3%. Currently, that number is down about 50%. So there’s a big material impact in the short term.”

Kirby added that the airline has seen some dynamic “blooding” entering the domestic leisure market. He said the company is already looking for places that will cut flights, a sharp drop in traffic from Canada into the U.S., and a popular market among government workers.

American Airlines cut its first-quarter earnings forecast, and in addition to demand pressures, bookings were hit by a fatal middle collision of an Army helicopter and conducted a regional aircraft in Washington, D.C. in January.

The company also felt a pullback from government travel and related travel, such as contractor travel.

“We know there are some follow-up effects for leisure travel related to it,” said CEO Robert Isom.

However, airline executives are optimistic about long-term demand in 2025.

Other powerful companies, such as Dick’s Sports Goods,,,,, Elf beauty and Abercrombie & Fitchreturn Post weak forecasts In recent weeks, although they show that they are positive for the second half of the year.

“I do think it’s just an uncertain world,” said Ed Stack, chairman of Dick Sports Goods, when asked about the company’s guidance. “What happens from a tariff perspective? You know, what happens to consumers if the tariff is reached and it goes up the way it can?”

Companies like Manchester United, Walmart and Abercrom have managed to surpass this past year S&P 500even if shoppers reduce discretionary spending, so this change in comments marks a significant shift. It’s a warning sign that shoppers may start cracking, and even excellent execution is not suitable for price increases caused by tariffs after four years of historical inflation.

Meanwhile, companies that have called for uncertain consumer dynamics over the past year sound more worried.

“Our clients continue to report worsening financial conditions over the past year as they are negatively affected by ongoing inflation. Many of our clients report that they only have enough money to use for basic necessities, some of whom point out that they must sacrifice even if necessary,” said Todd Vasos, CEO of Dollar General, Todd Vasos. income Called Thursday, adding that customers expected “more than ever” in value and convenience. this Deteriorate the consumer prospects Complicate the company’s own internal challenges.

“When we enter 2025,” Vasos continued. “We do not expect any improvement in the macro environment, especially for our core customers.”

Elsewhere in the retail industry, American Eagle The cold weather caused slower than the first quarter, but not just the temperature, warned Tuesday. The apparel retailer specifically raised “less strong demand” and said it was taking steps to reduce spending and manage inventory because it could pay for the future.

“(Consumers) are worried about the unknown. Not only tariffs, not only inflation, but we’re seeing the government cut off people’s shutdowns. They don’t know how that will affect them. They see plans being cut, they don’t know how that will affect them,” said CEO Jay Schottenstein. “When people don’t know what they don’t know, they get very conservative…it makes everyone nervous.”