Walmart (WMT) posted another strong quarter as inflation-weary shoppers searched for value.
Revenue and adjusted earnings per share came in higher than Wall Street expected in the retailer’s fourth quarter and fiscal 2025 results, released on Thursday before the market open. Quarterly revenue increased 5.3% to $182.6 billion, while adjusted EPS was up 10% to $0.66, compared with a year ago.
But its shares sank 8% in pre-market trading after the report. Walmart stock has soared over 75% in the past year, compared to a 23% gain for the S&P 500 (^GSPC) and a 13% drop at rival Target (TGT).
Same-store sales for Walmart US increased 4.6% in the quarter. The growth was boosted by the retailer’s success in attracting more higher-income shoppers yet again, with its emphasis on value and convenience.
Its Walmart US e-commerce business saw a 20% increase in sales, fueled by in-store pickup and delivery, as well its advertising platform and online marketplace. Strong seasonal sales in the holiday shopping season, which was five days less, also boosted the quarter.
“We have momentum driven by our low prices, a growing assortment, and an eCommerce business driven by faster delivery times,” CEO Doug McMillon said in the release, “We’re gaining market share, our top line is healthy, and we’re in great shape with inventory.”
Its subscription service, Walmart+, saw double-digit growth in the quarter, while membership and other income increased 33%. More customers paid up for expedited delivery, too.
The retailer’s US grocery business, which makes up 60% of total sales, saw mid-single digit same-store sales growth, boosted by increased foot traffic and e-commerce. Its health and wellness grew mid-teens, from an increase in pharmacy scripts, over-the-counter, same-day pharmacy delivery and sales of GLP-1 drugs, which contributed roughly 100 basis points. Discretionary items, like toys, home decor and fashion, which have been lagging in recent years, saw low single digit growth in the holiday quarter.
For the full year, Walmart surpassed Wall Street’s expectations, and its own guidance, for net sales which it expected to increase in the range of 4.8% and 5.1% for the fiscal year.
Net sales increased 5.6% for the 2025 fiscal year to $684.2 billion.
However, “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 analyst Krisztina Katai told clients in a note.
