Walmart Sales Rise But Shares Tumble On Forecast

Walmart reported solid fourth-quarter results Thursday behind higher US sales, but shares tumbled after its quarterly and annual projections missed estimates.

The retail heavyweight, the biggest US private-sector employer, pointed to strength in grocery and pharmaceutical sales in its home market as more high-income shoppers are drawn in for its value proposition.

But shares of the retail behemoth fell sharply after the company projected annual profits of between $2.50 and $2.60 a share in fiscal 2026, below the $2.77 expected by analysts.

The company sees three to four percent annual sales growth, lower than the 5.1 percent last year.

Executives said they were pleased with the just-finished quarter, alluding to heavy store traffic that made up for a shorter-than-usual holiday shopping season.

The company's muted outlook reflects uncertainty on macroeconomic conditions.

"We're one month into the year, so I think it's prudent to have an outlook that is somewhat measured," said Chief Financial Officer John David Rainey.

"There is certainly some unpredictability in any environment that we have, but we feel really good about our ability to navigate that," he said.

Executives expressed confidence at the company's ability to navigate the shifting international trade picture, with US President Donald Trump announcing myriad tariffs, some of which have been paused amid negotiations with other countries.

"Tariffs are something we've managed for many years and we'll just continue to manage that," said Chief Executive Douglas McMillon.

In its US division, Walmart pointed to "broad-based sales momentum" with its biggest market share gains coming from upper-income households, extending a period of growth for this category.

But in a sign that inflation has moderated, Walmart also said it achieved higher general merchandise sales as consumers boosted purchases of discretionary items.

The company pointed to improving economics in its ecommerce business, which has received billions of dollars in capital investment in recent years.

Walmart does not break out the financial performance of ecommerce on its income statement.

Overall profits dipped 4.4 percent from the year-ago level to $5.3 billion, while revenues rose 4.1 percent to $180.6 billion.

The results show Walmart's momentum "is still going strong," GlobalData analyst Neil Saunders said in a note.

"We continue to track more switching to Walmart from other retailers -- especially for products like household goods where consumers are eager to save money," he said.

Saunders acknowledged disappointment with Walmart's sales projection, but characterized it as "a solid forecast which continues to build on a very successful period of expansion."

Shares of Walmart slid 6.7 percent shortly after midday.

Walmart's guidance "spooked investors and has prompted some investors to book some of the significant profits they have gained in recent months," said a note from Briefing.com.

"In fairness, a good chunk of the guidance shortfall seems to us like Walmart is just being conservative. They cited uncertainties, which is a bit vague and did not cite definitive changes in consumer behavior."