Walmart on Thursday forecast sales for the fiscal year ending January 2026 below Wall Street’s current estimates, signalling that the world’s largest retailer expects inflation-weary customers to pull back after several quarters of solid growth.
The US retail giant forecast annual consolidated net sales to rise in the range of 3% to 4% – compared with analysts’ expectations of 4% growth – according to data compiled by the London Stock Exchange Group (LSEG).
In issuing the forecast, Walmart cited the need for caution navigating an uncertain geopolicatl landscape.
Its shares – which had risen about 72% in 2024 and hit a record high last week – were down 6%.
Meanwhile, shares of rival retailer Target lost 1.2% and Amazon declined 1.6%.
As one of the first major US retailers to shed light on the crucial holiday quarter, Walmart’s results reveal how Americans have responded to US 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 – US 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 US 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.
Chief financial officer of Walmart John David Rainey noted that the retailer did not include an assumption of new US tariffs in its guidance, but said it could handle any new duties well, without offering details.
'Momentum'
CEO of Walmart Doug McMillon said, “We have momentum driven by our low prices, a growing assortment and an eCommerce business driven by faster delivery times.”
The company, like other retailers such as Target and Best Buy, has seen persistent softness in its high-margin general merchandise business as consumers struggle to pay elevated grocery prices.
During the reported quarter, the company gained shares in general merchandise categories, including consumer electronics.
The retail giant’s dominance in groceries and its ability to secure the lowest prices from suppliers have made it a popular choice for value-conscious shoppers across all income groups.
Over the past year, the grocery chain has noted that its market share gains were primarily driven by households earning more than $100,000.
These households have been significant contributors to online sales, drawn to Walmart’s same-day and two-day deliveries and curb side pickup services from its 4,600 US stores.
Walmart 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.
Read More: Walmart Faces Tariff Challenges As Wall Street Awaits Record-Breaking Sales
