Walmart Stock Down More Than 8% after Earnings Report
The 4th quarterly earnings report for Walmart (WMT) was strong, but the company’s stock price still plummeted 8.17% on Thursday in premarket trading.
Walmart’s earnings were better than expected for its 4th quarter, but the company is still seeing its stock price drop as trading begins for Thursday. Adjusted earnings from the last three months were up 10% from this period last year, now at $0.66 per share. That just barely beat the analyst predictions.
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Store sales for Walmart in the United States increased by 4.6% in the same period. Online sales for the major retailer were even stronger, up 16% from last year. Walmart expected revenue growth around 3 or 4% by January 2026, which is when the current financial year will end.
Their adjusted earnings per share are expected to be between $2.50 and $2.60 per share, which is where the problem arises. The LSEG estimate is higher, at $2.76 per share.
The Upside and the Downside
During the earnings call, CEO Doug McMillon said that the company’s inventory is in great shape, they are seeing growth due to their low prices and fast delivery times, and they are noticing an increased market share. He said the company is benefiting from its eCommerce arm and is working hard to improve its ROI.
Overall revenue for the year was up 2.1%, which hit $681 billion. The company’s annual dividend increased by 13%, and that is the most significant increase there in more than 10 years.
The downside of Walmart’s report is that they need to be doing very well to counter consumer fears about rising prices. With more tariffs coming from foreign governments on imported goods and higher prices for imported goods as a result, consumers are worried about what the cost of living will be like by the end of the year. Even with Walmart’s low prices, they may not be able to keep profits high if the economy experiences a lull this year.
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