Walmart (WMT) just dropped its latest earnings report, and the numbers are solid—so why did the stock tumble 8% in pre-market trading?
Let’s break down what’s going on with one of the biggest retailers on the planet and what it means for investors.
Walmart’s Earnings: Strong Growth, But Investors Want More
For Q4 of fiscal 2025, Walmart pulled in $182.6 billion in revenue—up 5.3% from last year—while adjusted earnings per share (EPS) jumped 10% to $0.66. The numbers beat Wall Street predictions, but apparently, that wasn’t enough to keep investors happy. WMT shares fell 8% in pre-market trading after the report, despite outperforming the S&P 500’s 23% gain and crushing Target’s 13% drop over the past year.
Why Did Walmart Stock Fall?
So, what’s the deal? Analysts say investors are more focused on Walmart’s outlook for 2025, which is shaping up to be more conservative than expected. Deutsche Bank’s Krisztina Katai noted that investors might be disappointed by Walmart’s cautious guidance, even though the company beat its own targets for 2024.
E-Commerce and Higher-Income Shoppers Drive Growth
Walmart’s success isn’t just about groceries anymore. Same-store sales in the US rose 4.6%, thanks to more higher-income shoppers looking for value. E-commerce sales shot up 20%, fueled by in-store pickup, delivery, and Walmart’s growing online marketplace. Plus, Walmart+ subscriptions saw double-digit growth, with more customers paying for faster delivery.
Key Revenue Drivers
- US Grocery Business: Makes up 60% of total sales, with mid-single-digit same-store growth.
- Health and Wellness: Mid-teens growth driven by pharmacy scripts, over-the-counter sales, and GLP-1 drugs.
- Discretionary Items: Low single-digit growth in toys, home decor, and fashion during the holidays.
Annual Performance and Outlook
For the full year, Walmart’s net sales hit $684.2 billion—up 5.6% and above expectations. CEO Doug McMillon said the company’s momentum is fueled by “low prices, a growing assortment, and faster delivery times.” But investors seem more focused on what’s ahead. With inflation still squeezing consumers, Walmart’s cautious guidance for 2025 is making some investors nervous.
What’s Next for WMT?
So, where does Walmart stock go from here? Despite the post-earnings dip, WMT is still up over 75% in the past year. With strong growth in e-commerce, grocery, and health services, Walmart’s long-term outlook remains solid—especially if inflation continues to push higher-income shoppers toward value retailers. But short-term volatility could persist as investors digest the company’s conservative 2025 forecast.
Walmart’s Q4 results were strong, but investors expected more bullish guidance for 2025. Still, with its growing e-commerce business, loyal customer base, and expanding services like Walmart+, WMT remains a key player in retail. For investors, the recent dip could be a buying opportunity—assuming Walmart continues to deliver on its long-term growth strategy.
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