Walmart shares drop as retailer says profit growth will slow
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Walmart
shares fell 8% in premarket trading Thursday, as the big-box retailer said profit growth will slow this fiscal year even as sales continue to climb.
Walmart said holiday-quarter revenue rose about 4% and e-commerce sales shot up 20% in the U.S., as growth in store pickup and home deliveries and gains with upper-income shoppers boosted results. But its outlook disappointed Wall Street.
In the fiscal year ahead, the discounter said it expects net sales to grow 3% to 4% and adjusted operating income to increase between 3.5% to 5.5% on a constant currency basis. The company said that includes a 150 basis point, or 1.5 percentage point, headwind from acquiring smart TV company Vizio and following a leap year in 2024. For the just completed fiscal year, Walmart posted adjusted operating income growth of 9.6% on a constant currency basis.
The company also said it expects full-year adjusted earnings of $2.50 to $2.60 per share, which includes a 5 cent per share headwind from currency. That fell short of the $2.76 per share Wall Street had expected.
In an interview with CNBC, Chief Financial Officer John David Rainey described consumer spending patterns as “steady” and said “there’s not any sharp changes that we’ve seen.”
Yet he acknowledged “there’s far from certainty in the geopolitical landscape.”
About two-thirds of what Walmart sells is made, grown or assembled in the U.S. Yet if tariffs on imports from Mexico and Canada take effect, he said Walmart is “not going to be completely immune.”
“We’ve lived in a tariff environment for the last seven or eight years, and we’ll do what we know how to do,” he said. “We’ll work with suppliers. We’ll lean into our private brand. We’ll shift supply where necessary to try to take advantage of lower costs that we can then pass on to consumers.”
Since Walmart is not sure if the tariffs will take effect next month, the company did not factor them into its guidance, Rainey said.
Here is what the big-box retailer reported for the fiscal fourth quarter compared with Wall Street’s estimates, according to a survey of analysts by LSEG:
In the three-month period that ended Jan. 31, Walmart’s net income fell to $5.25 billion, or 65 cents per share, compared with $5.49 billion or 68 cents per share in the year-ago period. Revenue rose from $173.39 billion in the year-ago quarter. The company’s adjusted earnings per share figure excluded one-time items, including opioid-related legal costs and gains and losses on equity and other investments.
Comparable sales, an industry metric also known as same-store sales, increased 4.6% for Walmart’s U.S. business and 6.8% for Sam’s Club, excluding fuel.
Walmart’s e-commerce sales in the U.S. soared 20% compared with the year-ago period. That marked the 11th straight quarter of double-digit gains. Global e-commerce sales rose 16%.
In the Walmart U.S. segment, customers’ store visits and purchases climbed, as transactions rose 2.8% and average ticket increased 1.8% year over year.
As Walmart is the top grocer in the U.S., investors often view it as a barometer of consumer health. Investors have tried to parse whether softer U.S. retail sales in January were a blip or warning sign. Wall Street also is trying to understand the potential impact of policy decisions, such as tariffs, on consumer spending.
Restaurant chains, including Restaurant Brands
’ Burger King and Popeyes, said sales improved in the fourth quarter, but they had weak trends in January.
Yet those restaurants and some retail experts have blamed short-term factors for the drop, including winter storms, consumers taking a break after splurging over the holidays and contending with damage and disruption from the Los Angeles wildfires.
Rainey echoed those sentiments, saying cold weather and the wildfires hurt Walmart’s sales. He said that’s a temporary factor, however, and doesn’t indicate a change in consumer spending patterns.
Walmart’s e-commerce growth and newer initiatives worked in its favor in the fourth quarter. Its advertising business and third-party marketplace are small compared with Amazon’s, but have posted gains and driven higher margins than Walmart’s retail business.
Rainey pointed to double-digit gains in the fourth quarter in global advertising, membership income and Walmart’s fulfillment services segment, which packs and ships orders to third-party sellers.
“These are all higher margin, faster-growing parts of our business where the math is just suggesting that our margins are going up over time,” he said. “And frankly, I don’t see any end to this.”
Walmart also hiked its dividend by 13% to 94 cents per share, the largest increase in more than a decade.
As of Wednesday’s close, shares of Walmart are up about 83% over the past year. The stock closed on Wednesday at $104.00, up about 15% so far this year and outpacing the approximately 4% gains of the S&P 500 during the same period.
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Walmart stock dived and dragged on the Dow Jones industrials futures early Thursday, after its Q4 2025 results included a narrow miss on revenue as well as soft guidance. Shares of big box retail rival Target also traded lower in premarket action.
Walmart (WMT) reported earnings of 66 cents per share adjusted on $180.6 billion in revenue.
FactSet expected an 8% increase in earnings to 65 cents per share on about 4% revenue growth to $180.07 billion.
Comparable sales for Walmart U.S. rose 4.6%, edging out analyst views for 4.4% growth. Global e-commerce sales grew 16% during the quarter. The company’s global advertising business grew 29%.
Walmart expects Q1 2026 earnings to range from 57 cents to 58 cents per share adjusted on 3% to 4% sales growth. That was below FactSet consensus of 64 cents per share on 3.4% revenue growth.
For the year, Walmart predicts earnings of $2.50 to $2.60 per share on 3% to 4% sales growth. Analysts expect full-year earnings of $2.49 per share on about 5% revenue growth.
The Dow Jones component also raised its dividend by 13% to 94 cents per share, marking its largest increase in over a decade.
Shares fell more than 8% premarket Thursday. Rival Target (TGT) slid more than 2%.
Prior to earnings, WMT stock had rallied more than 15% since the start of the year, and was extended above a buy zone for a flat base following a late-January breakout. Shares hit a record high of 105.30 on Feb. 14.
That move was part of a larger rally, which saw Walmart advance 89% from a February 2024 breakout.
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Walmart Warns of Slower Sales Gains After a Bumper Year
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Walmart Warns of Slower Sales Gains After a Bumper Year
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Eggs. Coffee. Gas. The prices Americans pay for many everyday items have been stubbornly high. That has been surprisingly good for Walmart WMT 0.21%
increase; green up pointing triangle
.
The discount retailer and country’s biggest grocer—best known for its “everyday low prices” slogan—has been drawing in shoppers of all stripes amid high inflation. They have come to Walmart searching for its store brand food, holiday toys and even to pick up weight-loss medicines at the pharmacy counter.
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