Walmart on Thursday forecasts sales and profits for the fiscal year ending in January 2026 below Wall Street estimates.
Walmart stock, which rose roughly 72% in 2024 and hit a record high of $105 last week, fell 6%. The target stock of rival retailers fell 1.6%, while Amazon fell 0.9%.
Data compiled by LSEG shows that the company predicted its earnings per share for the fiscal year ending January 2026, ranging from $2.50 to $2.60, ranging from $2.50 to $2.60.
Walmart's lower than expected guidance is a warning that U.S. consumer spending is slowing, said Brian Mulberry, client portfolio manager at Zacks Investment Management, a Walmart investor.
“The labour market is still strong at this point,” he said, adding that if employment declines continue following Walmart soft guidance, “it will be a strong signal that economic growth is slowing.”
Walmart is expected to increase annual revenues between 3% and 4%. Analysts were hoping for 4% growth.
Sales outlook includes a 20 basis points impact from the negative impact of the 2024 jump year addition date, and a 20 basis points increase due to the acquisition of Smart-Television maker Vizio.
As one of the first major US retailers to shed light on key holiday quarters and this year, Walmart forecasts say retailers are under additional tariffs on Trump's products made in China It suggests that the freight will be 25% tariff threats, products made in Mexico and Canada.
Despite publishing disappointing guidance, Walmart considers U.S. shoppers “resilient” and focuses on value, Chief Financial Officer John David Rainey said after the revenues said in the call.
He said retailers did not include new US tariff assumptions in their guidance, but Walmart could manage their new obligations without providing details.
“We're coming a month later this year, so I think it's wise to have a somewhat measured outlook. We don't want to go any further than ourselves. Anything we have The environment certainly has unpredictability, but I feel really good about the ability to navigate it,” Rainey said.
Retail sales in the US experienced the biggest monthly decline in two years in January, hampered by frigid temperatures, wildfires and car shortages.
However, Walmart appeared to remain unharmed as it saw a 4.6% increase in total US sales in the fourth quarter and January was the strongest month of sales, Walmart said. The analyst estimate increased by 4.15%.
Walmart said high-income customers or households whose top drivers of market share in the recent quarter earned six figures were top draws for seasonal products, cars and home products. General product sales rose at low seats, while grocery sales rose at single mid-single numbers.
The company also notes the rise in GLP-1 drug sales over the quarter. Overall, transactions excluding fuel were averaged checks up 2.8% and 1.8% in over 4,600 US stores.
US e-commerce sales rose 20%, the retailer added that a third of shoppers have chosen to deliver within three hours.
In the first quarter, consolidated net sales are expected to increase between 3% and 4% compared to a 3.3% growth rate.
Adjusted revenue for the fourth quarter was 66 cents per share, boosting expectations by 2 cents. Sales increased 4.1% to $180.6 billion.
