(Reuters) – Walmart on Thursday forecast sales for the fiscal year ending January 2026 largely below Wall Street estimates, suggesting the world’s largest retailer expects inflation-weary consumers to pull back after several quarters of solid growth.
Shares of the retailer were down 7% in trading before the bell. The stock had risen about 72% last year and hit a fresh record high of $105 last week.
Some analysts noted that Walmart typically issues a conservative forecast early in its fiscal year.
The Bentonville-based retailer forecast annual sales to rise in the range of 3% to 4%, compared with analysts’ expectations of 4% growth, according to data compiled by LSEG. The outlook includes a 100 basis point impact from an additional day in the leap year of 2024, and a boost of 20 basis points from the acquisition of smart-television manufacturer Vizio, the company said in a statement.
As one of the first major U.S. retailers to shed light on the crucial holiday quarter, Walmart’s forecast hints at how the retailer expects to fare under President Donald Trump’s additional tariffs on goods made in China, and the threat of 25% tariffs on products made in Mexico and Canada.
In January, the month Trump took office, U.S. retail sales experienced their largest decline in two years, hampered by frigid temperatures, wildfires, and motor vehicle shortages.
However, Walmart appeared to remain unscathed, reporting total U.S. comparable sales growth of 4.9% in the fourth quarter, which includes November, December, and January. That surpassed analysts’ estimates of a 4.15% increase, according to data compiled by LSEG.
“We have momentum driven by our low prices, a growing assortment, and an eCommerce business driven by faster delivery times,” said Walmart’s CEO Doug McMillon.
Higher income customers or households making six-figures were the top drivers of market share in the latest quarter, Walmart said, with seasonal merchandise, auto and home products being top draws.
Transactions, excluding fuel, rose 2.8% at its 4,600 U.S. stores with average checks at the till rising 1.8%.
U.S. e-commerce sales rose 20% as shoppers also opted for more store-fulfilled pickup & delivery options, the retailer said, adding that one-third of shoppers elected to have deliveries in three hours or less.
Walmart on Thursday also forecast adjusted earnings per share for fiscal year 2026 in the range of $2.50 to $2.60, compared with analysts’ expectations of $2.76 in profit, according to data compiled by LSEG.
(Reporting by Savyata Mishra in Bengaluru and Siddharth Cavale in New York; Editing by David Gregorio)
