Walmart Inc. (NYSE:WMT) stock turned volatile on Thursday after the company issued a worse-than-expected fiscal 2027 outlook.
• WMT stock may gain traction. See the full story here.
Earnings Snapshot
The company reported adjusted earnings per share of 74 cents, beating the Street view of 73 cents.
Sales of $190.70 billion rose 5.6% year over year (up 4.9% in constant currency), topping the analyst consensus estimate of $190.43 billion.
Quarterly gross margin rate improved 13 basis points (bps), led primarily by Walmart U.S. results. Adjusted operating income rose 10.5% Y/Y in the quarter.
Operating cash flow stood at $41.6 billion and free cash flow at $14.9 billion in the year.
Walmart exited the fourth quarter with cash and equivalents worth $10.7 billion and total debt of $51.5 billion.
Segment Performance
Walmart U.S. revenue rose 4.6% Y/Y to $129.2 billion, driven by strong eCommerce momentum (+27% Y/Y) thanks to improved store-fulfilled pickup & delivery, advertising, and marketplace.
Walmart International sales increased 11.5% Y/Y to $35.9 billion, with growth led by Flipkart, China, and Walmex. Transaction counts and unit volumes improved across markets.
Sam's Club U.S. revenue grew 2.9% Y/Y to $23.8 billion, supported by strength in grocery and general merchandise, and continued share gains.
Other Key Metrics
Walmart posted a 4.6% Y/Y increase in U.S. comparable sales, excluding fuel, for the fourth quarter. Sam's Club reported U.S. comparable sales growth of 6.8% Y/Y, excluding fuel, over the same period.
Global e-commerce sales climbed 24% Y/Y, driven by strong growth in store-fulfilled pickup and delivery services as well as its marketplace business.
The company's global advertising operations, including VIZIO, surged 37% Y/Y, while Walmart Connect in the U.S. posted a 41% Y/Y increase.
Membership and other income increased 1.1% Y/Y, supported by a 15.1% Y/Y jump in global membership fee revenue.
Dividend Boost
The company has raised its fiscal 2027 annual cash dividend to 99 cents per share, up 5% from 94 cents last year, marking its 53rd consecutive year of dividend increases. The dividend will be paid in four quarterly installments of 24.75 cents per share.
Walmart bought back shares worth $1.1 billion in the quarter. Also, the company disclosed a new $30 billion share repurchase authorization.
Earnings Call Key Takeaways
Walmart's CEO said U.S. consumer spending remains broadly resilient, but financial pressure persists among lower-income households. Customers earning below $50,000 continue to face stretched budgets, prompting more selective, value-focused purchasing behavior.
The company also noted that shoppers are becoming increasingly "choiceful" with discretionary spending. Notably, the majority of Walmart's market share gains in the fourth quarter were driven by higher-income households earning above $100,000, indicating stronger engagement from more financially stable consumers even as lower-income segments remain constrained.
Outlook
Walmart projects fiscal 2027 adjusted earnings of $2.75 to $2.85 per share, below the analyst consensus estimate of $2.96, and sales of $731.12 billion to $738.19 billion, compared with the Street view of $748.06 billion.
For the first quarter, the company expects adjusted earnings of 63 cents to 65 cents per share and sales of $169.74 billion to $171.38 billion.
WMT Price Action: Walmart shares were up 0.81% at $127.64 during premarket trading on Thursday, according to Benzinga Pro data.
Photo via Shutterstock
