The trend: Several retailers and brands are issuing guidance below analyst expectations.

Walmart forecast adjusted EPS of $2.75 to $2.85 this fiscal year, below the $2.97 analysts projected, saying it was “prudent” to remain conservative given a “somewhat unstable” backdrop.

Adidas projects operating profit of about €2.3 billion ($2.67 billion), well below the €2.72 billion ($3.16 billion) analysts estimated. That implies a margin of less than 9%, versus the 10% forecast, and the company does not expect to reach that level until 2028. CEO Bjorn Gulden cited an “environment that is not easy,” while CFO Harm Ohlmeyer noted adidas would have reached a 10% margin this year if not for US tariffs and a weak dollar.

Carter’s expects mid-single-digit Q1 sales growth but guided to EPS of $0.02 to $0.08, well below the $0.36 analysts expected and the $0.66 earned a year ago. The company said tariffs reduced Q4 profit by $40 million—roughly double the Q3 impact— while product costs rose due to investments to improve assortment competitiveness.

Bath & Body Works forecast a steeper-than-expected annual sales decline, despite beating holiday-quarter estimates, citing cost-of-living pressures and a weak labor market that have curbed discretionary spending.

Steve Madden pulled its guidance altogether after the Supreme Court’s tariff ruling, with CEO Edward Rosenfeld telling analysts the decision made it difficult to calculate the cost of tariffs in the coming months.

Why is this happening? The common thread is deepening uncertainty across an already challenging macro backdrop.

The administration’s tariff policies continue to evolve (keep track of the latest developments in our Live FAQ: How the US Supreme Court's Tariff Reversal Could Shift Retail and Search Growth). Treasury Secretary Scott Bessent told CNBC that President Donald Trump will likely raise the 10% universal tariff to 15% this week and said ongoing trade studies could pave the way for additional duties. If tariffs return to prior levels, retailers will likely pass at least some of the higher costs on to consumers.

The war in Iran could further lift prices. The national average gas price has risen to about $3.20 from $2.89 a month ago, according to AAA—up nearly 11%. Diesel prices have climbed by a similar margin, increasing logistics costs and pressuring margins.

Implications for retailers and brands: Retailers know how to navigate tough environments and can plan for the unexpected, but only to a point. When executives were recently asked which external trends would have the biggest impact on business over the next 12 months, neither a war in Iran nor shifting trade policies ranked among the top five concerns. Instead, leaders were focused on issues such as AI and broader economic pressures, per Forvis Mazars.

The current situation leaves retailers and brands little choice but to stay defensive—tightening costs, keeping inventory lean, and building contingencies into forecasts. But even the best-prepared companies may not be ready for the full range of disruptions unfolding. That’s why many merchants may choose to prioritize discipline rather than expansion for the time being.