Walmart stock tanks after its conservative forecast disappoints investors
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Despite reporting strong results for its latest fiscal year, Walmart’s (WMT+0.23%) stock sank in early trading on Thursday after the retailer issued conservative guidance for its upcoming year.
Bentonville, Arkansas-based Walmart forecasted its annual sales for its fiscal year ending in January 2026 to increase between 3% and 4%, slightly below analysts’ expectations, with adjusted operating income growing between 3.5% and 5.5%. That guidance includes headwinds stemming from Walmart’s $2.3 billion acquisition of TV manufacturer Vizio, which was finalized in December, and because 2024 was a leap year.
Although Walmart usually issues more conservative guidance, the company has raised investors’ expectations after delivering its best performance since 1998.
Shares fell as much as 8% in pre-market trading. But those losses pale in comparison to the stock’s massive gains over the last year, which come out to about 71%.
Walmart said same-store sales for its U.S. division grew 4.6% last quarter, bolstered by the company’s ability to attract high-income households, while its -e-commerce business notched a 20% increase in sales. Revenue for the period increased by 4.1% to $180.6 billion, slightly above analysts’ consensus, according to estimates compiled by FactSet (FDS+1.14%). Adjusted earnings per share came in at 66 cents, just above expectations for 65 cents.
For the full-year, revenue grew 5.1% to $681 billion, the company said, while operating income rose by 8.6% to $2.3 billion.
“We have momentum driven by our low prices, a growing assortment, and an eCommerce business driven by faster delivery times,” CEO Doug McMillon said in a statement. “We’ll stay focused on growth, improving operating margins, and strengthening [return on investment] as we invest to serve our customers and members even better.”
Walmart said Thursday it would raise its annual cash dividend for its last fiscal year by 13% to 94 cents per share, marking its largest increase in more than a decade. The company has raised the annual dividend for 52 years in a row, CFO John David Rainey said in a statement.
