Walmart slides premarket on conservative sales guidance despite bumper holiday quarter

• Walmart fell sharply premarket after issuing conservative sales guidance for this year.
• CFO John David Rainey said it was "prudent to have an outlook that is somewhat measured."
• Revenue rose 5.3% in the fourth quarter of 2024, ahead of analyst expectations.

Walmart fell sharply in premarket trading after issuing conservative sales guidance for the coming year.

The retailer said it expected net sales to grow 3% to 4% and adjusted operating income in constant currency to rise by 3.5% to 5.5%.

CFO John David Rainey said on an earnings call: "We're one month into the year, so I think it's prudent to have an outlook that is somewhat measured. We don't want to get ahead of ourselves, there is certainly some unpredictability in any environment that we have, but we feel really good about our ability to navigate that."

The stock fell as much as 8.2% premarket but has risen more than 75% over the past year.

The slide came despite total revenues for the three months to January 31 rising 5.3% to $180.5 billion, slightly ahead of LSEG analyst forecasts of $180 billion.

Global e-commerce sales increased 16% in the key holiday period, while US sales soared 20% year-on-year.

"Investors will focus less on the quarter and more on the outlook for 2025, and specifically overlook what we expect to be an initial conservative, and below consensus, guide for the fiscal year," Deutsche Bank stock analyst Krisztina Katai said in a note.

Rainey said US consumers remained "resilient" over the past year. "As always, people are looking for value, and they want to save time. Becoming more convenient is helping to drive our growth."

Rainey also noted that Walmart now reached 93% of US households with same-day delivery, and that nearly a third of online shoppers chose to pay a fee for delivery within three hours.

In an interview with CNBC, he said there was little certainty in the geopolitical landscape and that Walmart would not be "completely immune" if tariffs were imposed by President Donald Trump. "We were impacted eight years ago but we're going to work hard to keep prices low for customers."

"We're gaining market share, our top line is healthy, and we're in great shape with inventory," Walmart CEO Doug McMillon said in a statement.

More switch to Walmart

In November, rival Target cut its profit guidance after reporting a significant earnings miss.

Neil Saunders, managing director at GlobalData, said in an emailed comment that Walmart's sales rally had continued, with US sales up by a "very strong" 5%, meaning the retailer added close to $7 billion to fourth-quarter sales compared to the prior year.

Since 2019, Walmart had increased its overall revenues by $157 billion, or "significantly more than the entire annual sales line of Target," underlining its leading position in the US.

Saunders added: "We continue to track more switching to Walmart from other retailers — especially for products like household goods where consumers are eager to save money.

"Across these categories, Walmart continues to do an excellent job of delivering value and is consistently one of the lowest price retailers, even if only by a few cents. This laser-like focus on value is one of the reasons Walmart continues to win, including among higher-income cohorts."