walmart stock edges lower as strong holiday growth is met with cautious earnings outlook
Walmart closed the holiday quarter with healthier-than-expected sales and growing online momentum, but the retailer’s forward guidance fell short of investor hopes, leaving walmart stock under pressure. The results underscored a split picture: operational gains from e-commerce and higher-margin services, paired with a conservative outlook for the year ahead.
Holiday-quarter strength: big numbers and faster digital growth
Walmart posted fiscal fourth-quarter revenue of $190. 7 billion, a 5. 6% increase from the prior year, driven by continued consumer focus on value and convenience. U. S. comparable sales rose 4. 6%, supported by a 2. 6% increase in transactions and a 2. 0% increase in average spend per visit. Grocery inflation remained muted, up just 0. 6% year over year, with some categories, including eggs and dairy, registering price declines—helping keep shopper traffic steady.
Digital sales were a standout. Global e-commerce climbed 24% in the quarter, including a 27% increase in the U. S., pushing online to a record 23% share of total sales. Faster-delivery options and expansion of store-fulfilled delivery—roughly 50% growth in that channel—helped lift the digital mix and reach more households within hours. Management also highlighted gains across income tiers, signaling that pricing and convenience strategies are resonating beyond traditionally price-sensitive shoppers.
Higher-margin mix helps profits, but guidance disappoints
Profits expanded at a faster pace than sales as higher-margin businesses contributed more to the bottom line. Adjusted operating income rose about 10% while overall sales growth was roughly 5%. Advertising and membership efforts played a meaningful role: advertising revenue grew 37% globally, with membership fee income up more than 15%. Combined, those revenue streams now account for a substantial portion of operating profit, helping to insulate margins.
Despite the quarter’s top-line gains and margin improvement, forward guidance tempered enthusiasm. The company now expects full-year sales growth of 3. 5% to 4. 5% and projects operating profit to rise 6% to 8%—a tone that investors read as cautious relative to recent momentum. The guidance was viewed as modest compared with the quarter’s performance and the stronger growth trajectory in e-commerce and higher-margin services, prompting a pullback in walmart stock.
Executives emphasized inventory discipline, noting inventory growth remained below the pace of sales—an indicator of tighter supply-chain management that supported margins during the season. Still, the conservative tone on future growth suggests management is prioritizing balance-sheet stability and margin protection over aggressive expansion in the near term.
Market implications and what to watch next
The results reinforce two durable themes: shoppers continue to prioritize value and convenience, and Walmart is increasingly monetizing digital reach through advertising and membership programs. That mix promoted better profitability in the quarter, but the cautious full-year outlook leaves investors focused on execution risks and the company’s ability to sustain digital growth without sacrificing margins.
Looking ahead, watch whether digital penetration keeps rising from its record 23% share, whether store-fulfilled delivery growth remains strong, and whether guidance is revised higher as the year progresses. For walmart stock, near-term movement will likely hinge on management’s ability to translate holiday momentum into sustained, higher-margin growth while keeping inventory and costs in check.
