Walmart’s Fiscal 2026 profit forecast falls short of estimates – Stock drops 7% as inflation, consumer spending, and tariff concerns loom

 

Walmart (WMT.N) has projected a lower-than-expected profit for the fiscal year ending January 2026, raising concerns about consumer spending in the face of inflation and economic uncertainty. The retailer’s stock fell 7% in pre-market trading, reflecting investor disappointment. Despite solid growth in recent quarters, Walmart's cautious outlook suggests a potential slowdown.

Why did Walmart's forecast disappoint investors?

The Bentonville, Arkansas-based company expects annual sales growth between 3% to 4%, slightly below analysts' expectations of 4% growth, according to LSEG data. Walmart's profit forecast for fiscal 2026 is $2.50 to $2.60 per share, compared to Wall Street’s expectation of $2.76 per share.

One factor impacting the outlook is the leap year in 2024, which will have a 20 basis point negative effect on sales due to an extra day. However, Walmart expects a 20 basis point boost from its recent acquisition of smart TV manufacturer Vizio.

How did Walmart perform in the holiday quarter?

Despite the weaker forecast, Walmart’s fourth-quarter U.S. comparable sales grew by 4.6%, surpassing analyst expectations of 4.15%. The company reported a 4.1% increase in total sales, reaching $180.6 billion.

• E-commerce sales surged 20%, driven by faster delivery options, with one-third of shoppers choosing deliveries within three hours or less.
• Higher-income households, making six figures or more, were the main contributors to Walmart's market share gains.
• Sales of seasonal merchandise, auto products, and home goods showed strong performance.
• Grocery sales grew in the mid-single digits, boosted by Walmart’s private-label brands.