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Walmart Inc. (NYSE: WMT) reported a robust performance for the fourth quarter, showcasing a significant increase in both revenue and operating income. The company achieved a revenue of $180.6 billion, marking a 4.1% growth, with a constant currency increase of 5.3%.

Operating income rose by 8.3% to $7.9 billion, driven by higher gross margins and a boost in membership income. Notably, the eCommerce sector experienced a 16% growth globally, highlighting the company’s strategic focus on enhancing its digital presence. Furthermore, the global advertising business grew by 29%, with Walmart Connect in the U.S. contributing a 24% increase.

Walmart U.S. also demonstrated substantial growth, with a 4.6% rise in comparable sales, excluding fuel. This growth was primarily driven by strong performance in general merchandise and seasonal sales, despite a shorter holiday shopping season. The company’s expedited delivery services resonated well with customers, further boosting eCommerce sales, which increased by 20%. The U.S. segment’s operating income rose by 7.4%, partly due to improved eCommerce economics and a favorable business mix.
 

Walmart Exceeds Expectations with Q4 Results

Walmart’s performance exceeded market expectations for the quarter. The company reported a GAAP EPS of $0.65 and an adjusted EPS of $0.66, surpassing the anticipated EPS of $0.6426. The revenue of $180.6 billion also exceeded the expected $179.85 billion, reflecting the company’s strong execution and strategic initiatives. The growth in eCommerce and advertising, along with improved operating margins, contributed significantly to this outperformance.

The international segment, however, faced some challenges, with net sales slightly declining by 0.7%. Despite this, the constant currency growth was 5.7%, driven by strong performances in China, Walmex, and Canada. The timing of Flipkart’s Big Billion Days event affected growth in the fourth quarter, although it provided a corresponding benefit in the third quarter. Overall, the international segment’s operating income grew by 12.1%, showcasing resilience despite currency fluctuations.
 

Walmart Expects Net Sales Increase by 3%-4%, Lower than Expected

Looking ahead, Walmart has provided guidance for the first quarter and fiscal year 2026. The company expects net sales to increase by 3% to 4% on a constant currency basis for both the first quarter and the full fiscal year. However, the growth will face a headwind of approximately 100 basis points in the first quarter due to the leap year effect, with a 15 basis points tailwind from the acquisition of VIZIO.

For fiscal year 2026, Walmart anticipates adjusted operating income to grow between 3.5% and 5.5% in constant currency, considering a 70 basis points headwind from the leap year and an 80 basis points headwind from the VIZIO acquisition. The company also projects an adjusted EPS of $2.50 to $2.60, factoring in a $0.05 headwind from currency fluctuations. Capital expenditures are expected to be approximately 3.0% to 3.5% of net sales, aligning with the company’s investment strategy to enhance its infrastructure and digital capabilities.

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