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Despite reporting strong results for its latest fiscal year, Walmart’s (WMT-1.49%) stock sank in early trading on Thursday after the retailer issued conservative guidance for its upcoming year.
Bentonville, Arkansas-based Walmart forecasted its annual sales for its fiscal year ending in January 2026 to increase between 3% and 4%, slightly below analysts’ expectations, with adjusted operating income growing between 3.5% and 5.5%. That guidance includes headwinds stemming from Walmart’s $2.3 billion acquisition of TV manufacturer Vizio, which was finalized in December, and because 2024 was a leap year.
The company’s guidance does not account for a few factors, including President Donald Trump’s tariffs, which may push retailers to raise their prices. During an earnings call, CEO Doug McMillon said that tariffs are something the company has managed before, and that “we’re wired to try and save people money, so that will be our ultimate goal.”
Although Walmart usually issues more conservative guidance, the company has raised investors’ expectations after delivering its best performance since 1998.
Shares fell as much as 8% in pre-market trading before losses were pared back to a 5% decrease. Those losses pale in comparison to the stock’s massive gains over the last year, which come out to about 72%.
Walmart said same-store sales for its U.S. division grew 4.6% last quarter, bolstered by the company’s ability to attract high-income households, while its -e-commerce business notched a 20% increase in sales. Revenue for the period increased by 4.1% to $180.6 billion, slightly above analysts’ consensus, according to estimates compiled by FactSet (FDS-0.66%). Adjusted earnings per share came in at 66 cents, just above expectations for 65 cents.
For the full-year, revenue grew 5.1% to $681 billion, the company said, while operating income rose by 8.6% to $2.3 billion.
“We have momentum driven by our low prices, a growing assortment, and an eCommerce business driven by faster delivery times,” McMillon said in a statement. “We’ll stay focused on growth, improving operating margins, and strengthening [return on investment] as we invest to serve our customers and members even better.”
Walmart said Thursday it would raise its annual cash dividend for its last fiscal year by 13% to 94 cents per share, marking its largest increase in more than a decade. The company has raised the annual dividend for 52 years in a row, CFO John David Rainey said in a statement.