Companies Scramble to Account for Impact of Tariffs

Back in the 1980s, one of the more popular series of children’s books was called Choose Your Own Adventure. Rather than telling a linear story, the books essentially offered readers a chance to build their own narratives by choosing from different options as they worked through the pages.

While a story about an airline’s corporate earnings report would probably flop with the series’ young target demographic, perhaps it would appeal more to investors and financial analysts looking for clarity in uncertain markets?? United Airlines effectively went the Choose Your Own Adventure route in its most recent earnings release, providing two different financial forecasts based on broader economic conditions. With so much uncertainty enveloping the global economy, the unique approach apparently felt appropriate to United executives.

As the scope and timing of recently announced tariffs have evolved, forecasts on the resulting economic impact have also varied. Last week, we described the difficulties for some executives, investors and financial analysts in trying to assess the murky landscape after new tariffs were announced at an event—referred to by the administration as “Liberation Day”— on April 2. The lack of consensus regarding the tariffs’ impact has prompted several publicly traded companies to revise or update their corporate guidance.

Even before the administration unveiled the new slate of tariffs, FedEx Corporation had lowered its fiscal 2025 revenue forecast to reflect “continued weakness and uncertainty in the U.S. industrial economy, which is constraining demand for our business-to-business services,” according to a March 20 press release. For its part, Atlanta-based Delta Air Lines Inc. backed off its full-year financial projections following the so-called ‘Liberation Day’ event, which introduced the new tariffs. The carrier cited a “lack of economic clarity” due to global trade disruptions.

“With broad economic uncertainty around global trade, growth has largely stalled. In this slower-growth environment, we are protecting margins and cash flow by focusing on what we can control,” Delta CEO Ed Bastian said in a statement released on April 9.

Expect to see more companies following suit, according to JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon.

Perhaps the most pragmatic approach for some companies is to acknowledge the limits of forecasting in the current climate. That seemed to be the message coming from John David Rainey, the chief financial officer of retail giant Walmart Inc., at an investment community meeting earlier this month. Interestingly, though, Walmart appears content to maintain its current annual forecast for performance this year.

Overall, you could make the case that corporate guidance has become harder to formulate and less reliable than ever. “Predictions are a fool’s game,” said Michael Arone, chief investment strategist at State Street Global Advisors for the US SPDR ETF business, in an interview with Bloomberg. “And today’s environment make[s] them even more foolish.”