Walmart announced on Thursday that its sales for the holiday quarter increased by almost 6%, with both its quarterly earnings and revenue exceeding analysts’ forecasts, driven by strong growth in e-commerce, advertising, and its third-party marketplace.
Looking ahead to the entire current fiscal year, Walmart projects net sales to grow between 3.5% and 4.5%, and adjusted earnings per share to be in the range of $2.75 to $2.85. This earnings prediction was below the $2.96 per share anticipated by Wall Street, as reported by LSEG.
During an interview with CNBC, CFO John David Rainey stated that prompt store-based deliveries are proving effective in drawing in more customers for Walmart, especially individuals with higher incomes.
“Our capacity to serve customers on such a large scale, coupled with our current speed, is significantly contributing to ongoing market share expansion,” he remarked. “These market share gains are visible across all income groups, but as observed in the previous quarter and several prior quarters, they are most pronounced among the higher-income demographic.”
Rainey further indicated that consumer price hikes stemming from inflation and former President Donald Trump’s tariffs are expected to moderate in the upcoming months. According to him, food inflation at Walmart in the fourth quarter was slightly over 1%, with a marginally higher rate for general merchandise.
He commented, “The pricing environment appears to be returning to a more typical state. I believe that, as a retail sector, we have largely absorbed or experienced the primary impact of the tariffs.”
Below are the results the large retailer announced for the fiscal fourth quarter, measured against Wall Street’s projections, based on an LSEG analyst survey:
- Earnings per share: 74 cents adjusted compared to 73 cents anticipated
- Revenue: $190.66 billion versus $190.43 billion predicted
These outcomes also highlight a significant turning point within the industry. For the first time ever, Amazon surpassed Walmart in annual revenue, reporting $716.9 billion in sales for its latest fiscal year, while Walmart recorded $713.2 billion.
The two companies are not directly comparable, given that Amazon generates a substantial portion of its income from cloud computing and various other tech services. Nevertheless, this situation emphasizes the intense rivalry between them, especially as Walmart adopts a comparable strategy by expanding revenue sources beyond traditional physical retail, such as through advertising and its online marketplace.
For the quarter concluding on January 31, Walmart’s net income fell to $4.24 billion, or 53 cents per share, a decrease from $5.25 billion, or 65 cents per share, reported in the same period last year.
When excluding non-recurring items such as investment profits and losses, legal settlements, and business restructuring, Walmart’s adjusted earnings per share reached 74 cents.
Revenue increased from $180.55 billion recorded in the prior-year quarter.
During the fourth quarter, comparable sales, excluding fuel, saw a 4.6% increase for Walmart’s U.S. operations and a 4% rise for Sam’s Club, relative to the same period last year. This industry benchmark, also known as same-store sales, encompasses revenue from stores and clubs that have been operational for at least one year.
U.S. e-commerce sales for Walmart climbed 27% year-over-year, driven by store-fulfilled online order pickups and deliveries, in addition to its third-party marketplace. This achievement represents the company’s fifteenth consecutive quarter of double-digit digital growth. Globally, e-commerce sales expanded by 24% compared to the previous year.
E-commerce represented 23% of sales for Walmart’s U.S. operations, setting a new record for the company. The digital expansion during the quarter featured an approximate 50% surge in store-fulfilled deliveries and about a 41% rise in sales from Walmart Connect, its advertising division, according to the company.
This quarterly report from Walmart was the initial one issued under its new Chief Executive Officer, John Furner. Furner, who previously served as Walmart U.S. CEO and has over thirty years of experience with the company, took over from Doug McMillon as Walmart’s highest-ranking executive on February 1.
Investors generally anticipate that Furner will pursue objectives similar to those of his predecessor, McMillon, including expanding Walmart’s online presence, drawing in a broader range of customers from all income levels, and accelerating the growth of more profitable ventures like its third-party marketplace and advertising services.
In addition to appointing a new CEO, Walmart has recently achieved several other significant milestones. Its shares moved to the technology-focused Nasdaq exchange in December, and its market valuation surpassed $1 trillion earlier in the current month.
By the close of trading on Wednesday, the company’s stock had appreciated by approximately 22% over the last year and about 14% since the start of the current year. This performance has exceeded the S&P 500’s 12% increase over the past year and its less than 1% gain year-to-date.