Walmart Surpasses Expectations, But Full-Year Outlook Disappoints
Walmart on Thursday reported fourth-quarter sales and earnings that exceeded Wall Street’s forecasts, driven by strength in e-commerce, advertising, and its third-party marketplace. However, the retail giant’s outlook for the current fiscal year fell short of analyst expectations, sending ripples through the market.
The company reported earnings per share of 74 cents, adjusted, compared to the 73 cents expected by analysts surveyed by LSEG. Revenue reached $190.66 billion, slightly above the anticipated $190.43 billion.
Chief Financial Officer John David Rainey highlighted the company’s continued success in attracting shoppers, particularly those with higher incomes, through speedy deliveries. “Our ability to serve customers at the scale that we have, combined with the speed that we now have, is really translating into continued market share gains,” Rainey said in an interview with CNBC. “Those market share gains are occurring across all income cohorts, but consistent with last quarter, the last few quarters, most notably in the upper-income segment.”
Walmart’s e-commerce sales in the U.S. Rose 27% compared to the year-ago period, fueled by store-fulfilled pickup and delivery, and the growth of its third-party marketplace. This marks the company’s 15th consecutive quarter of double-digit digital sales growth. Globally, e-commerce sales increased 24% year over year, accounting for 23% of U.S. Sales – a record high for Walmart.
The strong performance comes as Walmart navigates a complex economic landscape, with easing consumer price increases and the potential impact of President Donald Trump’s tariffs beginning to subside. Rainey noted that food inflation at Walmart in the fourth quarter was just above 1%, while general merchandise saw slightly higher increases. “It seems to be a little bit more of a normalized price environment,” he said, adding that the retail industry has largely absorbed the impact of tariffs.
Despite the positive quarterly results, Walmart anticipates net sales to increase by 3.5% to 4.5% for the full fiscal year, with adjusted earnings per share ranging from $2.75 to $2.85. This falls below Wall Street’s expectations of $2.96 per share, according to LSEG.
The quarterly report also marks a significant shift in the retail landscape. For the first time, Amazon surpassed Walmart as the largest retailer by annual revenue, posting $716.9 billion in sales for its most recent fiscal year compared to Walmart’s $713.2 billion. While the companies operate in different sectors – Amazon with its substantial cloud computing business – the milestone underscores the intensifying competition between the two retail giants.
This report is Walmart’s first since John Furner took over as CEO on February 1, succeeding Doug McMillon. Investors anticipate Furner will continue to prioritize growth in the online business, attracting a broader customer base, and expanding higher-margin revenue streams like the third-party marketplace and advertising.
Walmart’s net income for the three-month period ending January 31 decreased to $4.24 billion, or 53 cents per share, compared to $5.25 billion, or 65 cents per share, in the same period last year. Comparable sales for Walmart U.S. Jumped 4.6%, and Sam’s Club saw a 4% increase, both excluding fuel.
The company has recently achieved other milestones, including a move to the Nasdaq stock exchange in December and reaching a market value of $1 trillion earlier this month. As of Wednesday’s close, Walmart shares have climbed approximately 22% over the past year and about 14% year-to-date, outpacing the S&P 500’s 12% gain over the past year, but lagging its year-to-date gains of less than 1%.
