Walmart (WMT) Stock Falls After Weak Profit Outlook Overshadows Strong Q4 Sales

TLDR

• Walmart Q4 U.S. comparable sales rose 4.6%, beating the 4.4% estimate, with U.S. online sales jumping 27%
• Net income fell 19.4% to $4.24 billion due to equity investment losses
• Full-year EPS guidance of $2.75–$2.85 missed analyst estimates of $2.97
• For the first time, Walmart’s annual revenue ($713.2B) trailed Amazon’s ($716.9B)
• WMT stock slumped ~3.5% in premarket, on track to open ~9% below last Friday’s record close

Walmart delivered a solid fourth quarter on the top line, but Wall Street focused on what’s coming next — and it didn’t like what it saw.

The stock slumped 3.5% in premarket trading Thursday, putting it on track to open nearly 9% below last Friday’s record close of $133.89.

The problem wasn’t Q4 — it was guidance. Walmart projected full-year adjusted EPS of $2.75 to $2.85, well below the analyst consensus of $2.97. For Q1, it guided for EPS of $0.63 to $0.65, also missing the $0.68 estimate.

Walmart Inc., WMT

Full-year net sales growth guidance of 3.5% to 4.5% also fell short. The FactSet consensus implied 5.9% growth, pointing to revenue of around $747.94 billion.

On the revenue side, Q4 total sales came in at $190.66 billion, up 5.6% year-over-year and slightly ahead of the $190.49 billion estimate. The beat was driven by international sales, which jumped 11.5% to $35.9 billion — offsetting misses in the U.S. businesses.

U.S. comparable sales rose 4.6%, edging past the 4.4% consensus. Transactions rose 2.6% and average ticket value climbed 2%. U.S. online sales jumped 27%.

Sam’s Club and the Income Gap

Sam’s Club was a soft spot. Comparable sales rose 4%, missing the 4.3% estimate. Transactions grew 5.3%, but the average ticket fell 1.3%. Sam’s Club total sales of $23.8 billion also came in below the $23.97 billion estimate.

CFO John David Rainey noted the spending gap between high- and low-income households is widening. Walmart defines higher-income as households earning over $100,000 a year. A pullback in SNAP benefits also weighed on low-income spending in the quarter.

General merchandise prices rose 3.2% — a bigger jump than the prior quarter — while grocery prices grew less than 1%. Rainey flagged tariffs as a factor in continued price pressure heading into Q1.

Net income fell 19.4% to $4.24 billion, dragged down by equity investment losses. Adjusted EPS of $0.74 edged past the $0.73 consensus.

Amazon Overtakes Walmart in Annual Revenue

For the first time, Walmart reported lower annual revenue than Amazon. Walmart’s full-year net sales came in at $713.2 billion versus Amazon’s $716.9 billion, ending Walmart’s long run as the largest U.S. company by revenue.

Earlier this month, Walmart’s stock crossed a $1 trillion market cap for the first time. The stock is still up 21.8% over the past 12 months through Wednesday, outpacing the S&P 500’s 12% gain and well ahead of rival Target, which dropped 11.5% in the same period.

Walmart also announced a new $30 billion share buyback program.

New CEO John Furner formally takes the helm as Q4 results land, inheriting a business that continues to gain share across income groups — but faces tougher profit expectations ahead.

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