Walmart Guidance Outweighs Earnings Beat, Major Buyback Plan

Walmart stock eased Thursday, reversing from a slight gain on earnings as its outlook fell short of analyst estimates. It marks the first report under the leadership of new CEO John Furner, who took the helm of the Dow Jones retailer earlier this month.

Meanwhile, Walmart continues to expand its online sales channels and delivery options as it works to close the gap to Amazon.

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Walmart (WMT) reported earnings of 74 cents per share adjusted vs. estimates for 73 cents.

Total revenue grew 5.6% to $190.65 billion, also ahead of FactSet views for $190.49 billion.

Walmart reported e-commerce sales increased 24%, slowing slightly after two quarters of accelerating growth. Comparable sales for Walmart U.S. grew 4.6%, outpacing analyst estimates for 4.4% growth.

Overall sales for Walmart U.S. rose 4.6% to $129.2, bolstered by accelerating average ticket prices. Walmart International sales jumped 11.5%, driven by higher transaction counts and unit volumes across all markets.

Sales for Sam’s Club, excluding fuel, climbed 4%, with Walmart noting strength in grocery and general merchandise items.

**How Walmart Stock Delivers Returns By Riding Change. This Investor Explains. **

However, the Dow retailer’s outlook missed analyst forecasts.

Walmart expects Q1 earnings to range from 63 cents per share to 65 cents per share adjusted on 3.5% to 4.5% sales growth. FactSet predicts Q1 earnings of 68 cents per share on 5.4% sales growth.

Walmart sees 2027 earnings ranging from $2.75 to $2.85 per share, also below expectations for $2.97 per share adjusted.

The company also announced a new $30 billion share repurchase authorization, and increased its annual dividend by 5% to 99 cents per share.

AI, Drone Expansions

In an effort to increase its online presence, Walmart has pursued AI partnerships aimed at widening its shopping channels. Last month, Walmart announced a deal with Gemini and Google, allowing customers to shop Walmart and Sam’s Club in the AI browser. That followed a similar deal with OpenAI and ChatGPT in October.

Goldman Sachs analyst Kate McShane at the time said Walmart could see a sales lift from the partnerships, given the platforms’ large user bases and ability to connect with customers in new ways, The Fly reported.

Additionally, Walmart has expanded its delivery options as it competes with Amazon. Walmart in January partnered with Wing, a unit of Google-parent Alphabet (GOOGL), to bring drone delivery options to 150 new stores over the next year. That’s part of a larger effort to establish a network of over 270 drone delivery locations by 2027.

Under New Management

Furner succeeded Doug McMillon, Walmart CEO since 2016, on Feb. 1. Furner has served as president and CEO of Walmart U.S. since 2019, after working his way up through various positions from his starting role as an hourly associate in 1993.

McMillon officially stepped down on Jan. 31, after nearly 12 years at the helm. He will remain on the board until Walmart’s annual meeting in June to ensure a smooth transition.

Walmart Stock

WMT stock eased 1.4% Thursday, sliding between a slight gain and loss during daily trade. Shares are down 6.7% for the week.

Walmart stock last week surged into a profit-taking zone, which capped a 23% rally following its flat base breakout in late November.

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WMT shares hit an all-time high of 134.69 intraday Tuesday before reversing. Shares ended Thursday up 12% year to date.

Meanwhile, Walmart earlier this month became the first retailer to achieve a $1 trillion market capitalization after transferring to the Nasdaq in December.

You can follow Harrison Miller for more stock news and updates on X/Twitter @IBD_Harrison.

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