Walmart disclosed robust quarterly results on Thursday, benefiting from an increased shopping turnout by higher-income consumers purchasing groceries and discretionary goods during a brief holiday shopping season. Despite this positive performance, Walmart’s shares experienced a decline in premarket trading following the company’s projection of a full-year profit that fell below expectations.
The retail corporation reported a 4.1% rise in U.S. revenue for the fourth quarter, reaching $180.6 billion, aligning with Wall Street’s predictions. Its adjusted operating income saw a 9.4% increase on a constant currency basis over the three-month period and a 9.6% increase for the entire fiscal year. Nevertheless, the company foresees slower profit growth in the upcoming fiscal year. Walmart predicts that its net sales will grow by 3% to 4% for fiscal year 2026, while adjusted operating income is expected to rise between 3.5% and 5.5% on a constant currency basis.
The Arkansas-based company’s market presence has expanded, particularly among wealthier households, as it introduced over 150 new key brands to its selection and remodeled 650 stores over the past fiscal year, with 100 redesigned in the last three months. In the fourth quarter, Walmart witnessed a 20% increase in U.S. e-commerce sales and a 4.6% growth in U.S. store sales, driven by significant growth in general merchandise. This increase in discretionary spending marks a positive shift from the past few years when inflation forced consumers to limit their purchases to essential items.
Walmart has consistently exceeded Wall Street’s expectations for several quarters, successfully increasing both in-store and online traffic and capturing a larger share of higher-income households. John David Rainey, Walmart’s CFO, previously stated to FOX Business that the retailer has been enhancing its brand by updating store aesthetics, which has helped attract higher-income shoppers. Rainey mentioned that today’s Walmart is considerably different from the retailer of several years ago, having made changes to appeal to a broader demographic.
The company has also strengthened its grocery sector, as more consumers rely on Walmart for food purchases amid ongoing inflationary pressures. As a significant player in the U.S. retail market, Walmart serves as an important indicator of consumer health. Brian Mulberry, a client portfolio manager at Zacks Investment Management, pointed out to FOX Business that any significant revisions to Walmart’s guidance could signal a broader economic concern.
In the third fiscal quarter, Walmart reported a revenue increase of over 5% from the previous quarter, reaching $169.6 billion and surpassing Wall Street’s estimate of $167.72 billion. Additionally, its adjusted earnings per share exceeded estimates by 5 cents. In the three months ending October 31, U.S. store sales rose 5.3% due to strong performance across various merchandise categories and both physical and digital platforms. The company also noted continued market share growth in the U.S., especially in grocery and general merchandise, with households earning over $100,000 representing 75% of its market share gains.
