Walmart suffers biggest drop in more than a year as earnings forecast disappoints

Walmart shares skidded on Thursday after the world’s largest retailer warned of slower profit and sales growth, despite posting fourth-quarter results that topped expectations.

The stock’s current 6.2% drop would be its biggest one-day decline since November of 2023, according to FactSet data. Shares of rivals including Target, Costco, Dollar Tree, and Dollar General were slightly lower in early trading. Despite today’s stock drop, Walmart’s stock is still up around 77% over the past year.

Walmart’s revenue rose 4% for the holiday quarter, hitting $180.55 billion, slightly above Wall Street expectations of $180.01 billion. E-commerce was a standout, jumping 20% in the US as more shoppers opted for store pickups and at-home deliveries. Higher-income customers, or households making $100,000 a year or more, continued to be big contributors to the gains. 

But investors were disappointed by the company’s guidance for fiscal 2025. Walmart expects net sales to grow 3% to 4%, with adjusted operating income rising between 3.5% and 5.5% — well below last year’s 9.6% growth. The retailer also forecasted full-year earnings of $2.50 to $2.60 per share, falling short of Wall Street’s $2.76 estimate. 

While consumer spending has stayed steady, Walmart is still adjusting for geopolitical risks and potential tariffs on imports from Mexico and Canada. Walmart sources the majority of its goods domestically, but said it’s prepared to adjust its supply chain and lean more into private-label brands if tariffs take effect.

Still, Walmart’s core business remains strong. US same-store sales rose 4.6%, with Sam’s Club seeing an even bigger 6.8% gain.

Walmart also laid out a 13% dividend increase to $0.94 per share — the biggest hike in over a decade.