Walmart (WMT) posted another strong quarter of earnings — but it wasn’t enough for investors.
Both top and bottom lines came in higher than Wall Street expected in the retailer’s fourth quarter and fiscal 2025 results, released on Thursday before the market open. Quarterly revenue increased 5.3% year over year to $182.6 billion, while adjusted earnings per share were up 10% to $0.66.
However, Walmart stock dropped as much as 7% in early trading, as the retailer’s fiscal 2026 guidance disappointed investors. The move puts Walmart on track for its worst trading day since November 2023.
As of 3:45:14 PM EST. Market Open.
Same-store sales for Walmart US increased 4.6% in the quarter, as the retailer attracted more higher-income shoppers with its emphasis on value and convenience.
Walmart’s US e-commerce sales jumped 20% year over year, fueled by in-store pickup and delivery, as well as its advertising platform and online marketplace. Strong holiday sales also drove sales in the quarter.
“We have momentum driven by our low prices, a growing assortment, and an eCommerce business driven by faster delivery times,” CEO Doug McMillon said in the release. “We’re gaining market share, our top line is healthy, and we’re in great shape with inventory.”
Its subscription service, Walmart+, saw double-digit growth in the quarter, while membership and other income increased 33%.
The retailer’s US grocery business, which makes up 60% of total sales, saw mid-single-digit same-store sales growth, boosted by increased foot traffic and e-commerce. Discretionary items like toys, home decor, and fashion, which have been lagging in recent years, saw low single-digit growth in the quarter.
For the full year, Walmart surpassed Wall Street’s expectations. Net sales increased 5.6% to $684.2 billion.
However, “investors will focus less on the quarter and more on the outlook for 2025, and specifically overlook what we expect to be an initial conservative, and below consensus, guide for the fiscal year,” Deutsche Bank analyst Krisztina Katai told clients in a note prior to earnings.
For its fiscal year 2026, the company put forth conservative guidance, which it has done for the last two years. It projects to increase net sales between 3% to 4%.
“We’ve been operating in a highly dynamic backdrop for several years, and we expect this year to be no different,” Walmart CFO John David Rainey said on the earnings call. “Our outlook assumes a relatively stable macroeconomic environment, but acknowledges that there are still uncertainties related to consumer behavior and global economic and geopolitical conditions.”
