Delta, Walmart Pull 2025 Outlook as Tariff Impact Hits Forecasts

9 Apr at 11:55 am

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Delta, Walmart Pull 2025 Outlook as Tariff Impact Hits Forecasts/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ Delta Air Lines has withdrawn its 2025 financial guidance, citing economic uncertainty caused by the escalating global trade war. The airline is scaling back flight capacity and bracing for slower travel demand from both consumers and corporations. Despite better-than-expected Q1 earnings, Delta and other companies like Walmart are beginning to feel the fallout.

FILE – A woman wheels a cart with her purchases out of a Walmart store, Nov. 18, 2020, in Derry, N.H. Business closings on Christmas Eve are less common than those on Christmas Day, but many large chains still cut back hours or close up shop early for the coming holiday. Walmart will close at 6 p.m. on Christmas Eve, Sunday, Dec. 24, 2023. (AP Photo/Charles Krupa, File)

Delta’s Trade War Turbulence: Quick Looks

Forecast Withdrawn: Delta scraps full-year outlook due to tariff-driven uncertainty
CEO Statement: Ed Bastian says growth has “largely stalled”
Capacity Cuts: Airline reduces flight schedule for second half of 2025
First Quarter Results: $240M profit, or $0.37/share vs. $37M last year
Adjusted EPS: $0.46 beats analyst expectations of $0.40
Revenue Rise: Climbed to $14.04B from $13.75B, ahead of estimates
Fuel Savings: Avg. price per gallon fell to $2.47 from $2.79
Market Reaction: Delta stock rose 8% after results
Sector Struggles: Airline stocks hit hard, Delta down 41% in 2025
Walmart Impact: Retail giant also pulled Q1 outlook citing tariffs

Delta, Walmart Pull 2025 Outlook as Tariff Impact Hits Forecasts

Deep Look

ATLANTA, April 9, 2025 — Delta Air Lines, once poised for its most profitable year ever, has made a sharp course correction. The carrier announced Wednesday that it has withdrawn its 2025 forecast, citing unprecedented uncertainty driven by escalating global tariffs and reduced consumer confidence.

“With broad economic uncertainty around global trade, growth has largely stalled,” said CEO Ed Bastian in a statement. “We are protecting margins and cash flow by focusing on what we can control.”

Delta’s reversal underscores the real-world impact of President Donald Trump’s sweeping trade policies, which have sent tariff levels soaring and consumer confidence plummeting.

Guidance Grounded

As recently as January, Delta projected record earnings above $7.35 per share and over $4 billion in free cash flow for 2025. But the outlook changed rapidly as U.S. tariffs ignited retaliation from China, the European Union, and Canada.

Now, Delta is cutting flight capacity in anticipation of lower spending from both households and businesses. Bastian noted that domestic demand is softening, though international markets remain somewhat resilient.

Delta expects Q2 earnings between $1.70 and $2.30 per share, with revenue growth ranging from -2% to +2%. Analysts surveyed by FactSet had predicted $2.21 per share.

First Quarter Bright Spot

Despite the turbulence, Delta’s Q1 earnings beat expectations:

Net income: $240 million, or $0.37 per share
Adjusted earnings: $0.46 per share (vs. $0.40 expected)
Revenue: $14.04 billion, ahead of $13.81 billion forecast
Fuel costs: Average price dropped to $2.47/gallon, helping margins

Citi analyst Stephen Trent said Delta remains the best-positioned airline to weather ongoing trade turmoil. He praised the airline’s flexible strategy and resilient business model in a note to clients.

Delta’s stock surged 8% on the earnings report, although shares are still down 41% year-to-date—less than losses suffered by United and American Airlines.

Walmart, Too, Feels the Pain

Hours after Delta’s announcement, Walmart also pulled its first-quarter guidance, citing similar tariff-related concerns. These decisions reflect the broader unease rippling through major sectors of the U.S. economy.

“2025 is playing out differently than we expected,” said Delta President Glen Hauenstein during the earnings call. “We are adapting to current conditions while staying true to our long-term strategy.”

What’s Next?

Delta says it’s not ready to offer a revised full-year forecast but maintains confidence in its underlying fundamentals. It expects June quarter profitability of $1.5 to $2 billion, depending on fuel prices and travel trends.

The airline is focused on cost control, capital discipline, and ensuring liquidity in an increasingly volatile economic environment. Analysts say these moves may insulate Delta somewhat, but the uncertainty makes planning difficult.

Delta’s leadership emphasized they’re not panicking, but pivoting — using levers like flexible scheduling, fleet optimization, and dynamic pricing to protect profitability.