Walmart’s stock, along with shares of other major retailers, tumbled in early Thursday trading after the retail giant issued a weaker-than-expected forecast for the year ahead.
Despite meeting expectations with its fourth-quarter results, Walmart’s outlook for fiscal 2026 disappointed investors. Revenue for the quarter ending Jan. 31 climbed 4.1% year over year to $180.6 billion, slightly exceeding analysts’ expectations of $180 billion, according to FactSet. Adjusted earnings per share came in at 66 cents, just above the forecasted 65 cents. Additionally, the company announced a 13% increase in its dividend to 94 cents per share—the largest boost in over a decade.
CEO Doug McMillon highlighted the company’s strong momentum, citing low prices, an expanding product assortment, and a fast-growing eCommerce business. “We’re gaining market share, our top line is healthy, and we’re in great shape with inventory,” he said in the earnings release.
However, Walmart’s shares dropped about 8% to $95.72 before the opening bell as its full-year guidance failed to impress. The company expects net sales growth of 3% to 4%, falling short of analysts’ estimates of roughly 4%. It also projected adjusted earnings per share between $2.50 and $2.60 for the year, with the $2.55 midpoint significantly below Wall Street’s $2.77 estimate.
The disappointing forecast weighed on the broader retail sector. The SPDR S&P Retail ETF slipped 1%, while futures tracking the S&P 500 dipped 0.3%. Target shares fell 2.4%, Home Depot 0.4%, Costco Wholesale 1.6%, and Amazon.com 0.7%.
First-quarter guidance also came in under expectations, with Walmart predicting adjusted earnings per share between 57 cents and 58 cents—lower than analysts’ anticipated 64 cents. The company attributed its conservative forecast to a “generally stable consumer” and ongoing pressure from its global product and format mix. A Walmart spokeswoman described the guidance as a “prudent” start to the year.
The stock’s sharp drop wasn’t entirely unexpected. Walmart was one of the top performers in the Dow Jones Industrial Average in 2024 and has consistently traded above its 50-day moving average for more than a year, according to Jay Woods, chief global strategist at Freedom Capital Markets. Entering earnings season, Walmart shares traded at 37.3 times next year’s earnings—just shy of their five-year high of 37.9 times. The stock had climbed 15% this year and nearly 80% over the past 12 months.
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