Walmart shares are indicated flat in the pre-market despite what looks like a solid beat on the top and bottom line. The quarter itself was strong — but the guidance is pointing to a deceleration.
Shares initially fell on the weaker guidance but the CFO said it’s prudent to start the year with conservative guidance given an unstable backdrop and the market is taking that as a sign of sandbagging.
As for the numbers, the Q4 comp sales came in at +4.6% in the US, matching the prior quarter and well ahead of expectations. Adjusted EPS of $0.74 beat the $0.66 from a year ago by 12.1%. Global eCommerce sales surged 24%. On the surface, this is a consumer that’s still very much alive.
But the forward look is more cautious. Walmart is guiding FY27 net sales growth of 3.5-4.5% in constant currency, with adjusted EPS of $2.75-$2.85. That’s growth, but it’s a step down from the 5.1% constant currency sales growth they just delivered in FY26. For Q1, they’re guiding adjusted EPS of $0.63-$0.65, which is a narrower range that suggests management sees the consumer environment becoming less predictable.
Transactions at Walmart U.S. grew 2.6% while average ticket rose 2.0% — that’s a healthy split that suggests real volume growth, not just inflation. But like-for-like inflation was only +1.1%, down 20 basis points from Q3, and grocery inflation specifically was just +0.6%. That’s about as close to price stability as you’ll see from a major food retailer, and it supports the disinflation narrative the Fed wants to see.
The income demographic trend that’s been running for several quarters is still firmly in place. Walmart noted “broad-based share gains across income tiers led by upper-income households.” This is the trade-down effect that makes it difficult to separate Walmart’s competitive momentum from underlying consumer health.
Internationally, Canada posted 4.4% comps with eCommerce up 31%, which continues to show surprising resilience in the Canadian consumer despite everything the Bank of Canada has been navigating. China comps slowed to 10.7% from 13.8%, continuing a sequential deceleration, though the absolute level of growth there remains impressive.
For the Fed, the takeaway is nuanced. The consumer is spending, but the spending is increasingly value-oriented and digitally driven. Inflation in Walmart’s basket has faded largely due to food but might be picking up elsewhere. General merchandise inflation of +3.2% in Q4 — up 150 basis points from Q3 — could be an early signal that tariff-related pricing pressures are starting to creep in.
Shares of WMT have been on an incredible run in the past two years but now trade an an extremely high P/E, near 45x.
WMT stock
