TLDR
- Walmart Q4 U.S. comparable sales rose 4.6%, beating the 4.4% estimate; online sales jumped 27%
- Full-year EPS guidance of $2.75–$2.85 missed the $2.97 analyst consensus
- Net income fell 19.4% to $4.24 billion due to equity investment losses
- For the first time, Amazon’s annual revenue ($716.9B) overtook Walmart’s ($713.2B)
- WMT stock dropped ~3.5% premarket, on track to open ~9% below Friday’s record close of $133.89
Walmart posted a solid Q4 on revenue, but the market zeroed in on guidance — and the numbers weren’t good enough.
WMT stock fell 3.5% in premarket trading Thursday, putting it on track to open nearly 9% below last Friday’s record close of $133.89.
Q4 total revenue came in at $190.66 billion, up 5.6% year-over-year and just ahead of the $190.49 billion estimate. U.S. comparable sales rose 4.6%, beating the 4.4% consensus, with transactions up 2.6% and average ticket value up 2%. U.S. online sales surged 27%.
The beat was partly inflated by international sales, which jumped 11.5% to $35.9 billion. Walmart’s U.S. sales of $129.2 billion and Sam’s Club sales of $23.8 billion both came in below estimates.
Guidance Is the Problem
For Q1, Walmart guided for adjusted EPS of $0.63–$0.65, below the $0.68 analyst estimate. Full-year adjusted EPS guidance of $2.75–$2.85 also fell short of the $2.97 consensus.
Full-year net sales growth guidance of 3.5%–4.5% missed too. The FactSet consensus pointed to around 5.9% growth, implying revenue of $747.94 billion.
CFO John David Rainey said the company wants to keep “maximum flexibility” as it navigates the current environment. He flagged tariffs as a factor in continued price pressure, with general merchandise prices rising 3.2% in Q4 — a steeper climb than the prior quarter. Grocery prices grew less than 1%.
Low-Income Shoppers Pull Back
Rainey noted the spending gap between higher- and lower-income households is widening. A pullback in SNAP benefits weighed on low-income spending during the quarter.
Net income dropped 19.4% to $4.24 billion due to equity investment losses, though adjusted EPS of $0.74 edged past the $0.73 estimate.
Walmart also announced a $30 billion share buyback program.
Amazon Passes Walmart in Annual Revenue
For the first time, Amazon overtook Walmart as the largest U.S. company by revenue. Amazon posted $716.9 billion in net sales for its most recent full year, compared to Walmart’s $713.2 billion.
Despite Thursday’s drop, WMT is still up 21.8% over the past 12 months through Wednesday, ahead of the S&P 500’s 12% gain and well clear of rival Target, which fell 11.5% in the same period. Walmart’s stock also crossed a $1 trillion market cap earlier this month.
New CEO John Furner takes over a business still gaining share across income groups, with a $30 billion buyback in his back pocket — but tougher profit expectations ahead.
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