In This Article:
Walmart (WMT, Financials) shares fell 6.3% to $97.45 as of 2:02 p.m. GMT-5 after the company reported a 5% increase in fourth-quarter revenue to $178.9 billion.
Although the retailer observed success in e-commerce, membership, marketplace, and advertising, investor mood was impacted by questions about margin pressures and economic sensitivity.
Driven by grocery growth, Walmart U.S. comparable sales increased 4.6%; e-commerce sales jumped 16%. Improved inventory control helped to widen 53 basis point gross margins. Revenue from the market grew 37%; Walmart Fulfilment Services completed 45% of orders. Adjusted profits per share came out to be $0.66, somewhat above predictions of $0.65 by analysts.
With adjusted EPS range of $2.50-$2.60, Walmart forecasts 3%-4% consolidated net sales growth and 3.5%-5.5% operating income growth for fiscal 2026. The business anticipates headwinds in currencies to lower operating income by 150 basis points and sales growth by 100 basis points.
Analysts asked about margin durability and economic sensitivity. Excluding the leap year and the VIZIO acquisition, UBS analysts acknowledged management's trust in wide revenue sources and expected 5%-7% adjusted EBIT growth. While Morgan Stanley analysts asked about e-commerce profitability with Walmart's CFO referencing an 11% incremental margin, Goldman Sachs expressed worries about gross margins.
Inflationary pressures, wage investments, and possible tariff effects kept investors wary even with robust e-commerce and advertising growth.
This article first appeared on GuruFocus.