Walmart reports strong Q4 but warns profit growth will slow
Walmart Inc. ended its fiscal year on a strong note, with better-than-expected fourth-quarter earnings and revenue boosted by strong gains in e-commerce and more higher-income shoppers.
E-commerce sales in the U.S. jumped 20% during the holiday quarter, fueled by in-store pickup and delivery, marking the 11th straight quarter of double-digit gains. Global e-commerce sales rose 16%.
But the retail giant rattled the market on Thursday morning as it gave a soft outlook, cautioning that its profit growth will slow in its current fiscal year even as sales continue to rise. For the full year (fiscal 2026), Walmart expects net sales to increase 3% to 4%, which would imply sales of $694.7 billion to $701.5 billion, which is less than analysts were expecting.
Walmart expects adjusted earnings per share in the $2.50 to $2.60 range, which includes a $0.05 per share headwind from currency. Analysts were expected earnings per share of $2.76.
“We’ve been operating in a highly dynamic backdrop for several years, and we expect this year to be no different,” CFO John David Rainey said on the company’s 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.”
Those conditions include nagging nflation and the impact of potential tariffs.
Walmart said its forecast did not account for the effects of tariffs.
“Tariffs are something we’ve managed for many years and we’ll just continue to manage that,” CEO Doug McMillon said on the earnings call. “We can’t predict what will happen in the future, but we can manage it really well and we’re wired to try and save people money, so that’ll be our ultimate goal.”
Walmart's net income fell to $5.25 billion, or $0.65 a share, for the quarter ended Jan. 31, from $5.49 billion, or $0.68 a share, in the year-ago period. Adjusted earnings were $0.66, just ahead of analyst estimates of $0.65 per share.
Total revenue rose 4.1% to $180.55 billion, topping estimates of $180.19 billion. Net sales rose 4% to $178.83 billion, ahead of estimates of $178.71 billion.
Walmart U.S. sales increased 5% to $123.5 billion, better than the $122.95 billion analysts had expected. Comparable-store sales rose a better-than-expected 4.6%, amid ongoing share gains across categories, with increased customer transactions in both stores and online.
Grocery, which makes up 60% of total sales, saw mid-single digit same-store sales growth during the quarter, boosted by increased foot traffic and e-commerce. General merchandise generated low-single-digit growth, with hardlines, toys, home and fashion the best-performing categories.
Comparable sales surged 6.8% at Sam’s Club, above expectations of 5% growth. Transactions rose by 5.4%. The average ticket increased 1.3%.
Walmart’s global advertising business grew 29% during the quarter, including 24% for Walmart Connect in the U.S.
“Our team finished the year with another quarter of strong results,” McMillon stated in the earnings release. “We have momentum driven by our low prices, a growing assortment, and an e-commerce business driven by faster delivery times. We’re gaining market share, our top line is healthy, and we’re in great shape with inventory. We’ll stay focused on growth, improving operating margins, and strengthening ROI as we invest to serve our customers and members even better.”
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Separately, Walmart announced it raised its annual dividend 13% to $0.94 a share from $0.83 a share. It was the largest increase in more than a decade.
“We're proud to be increasing our annual dividend for the 52nd consecutive year,” stated Rainey in the earnings release. "Dividends are part of our balanced capital returns approach and this year’s 13% increase is a sign of our continued confidence in sustained business performance.”
