Walmart Shares Drop As Profit Growth Expected To Slow

Walmart shares fell roughly 6% in afternoon trading Thursday, as the big-box retailer said profit growth will slow this fiscal year even as sales continue to climb.

Walmart said holiday-quarter revenue rose about 4% and e-commerce sales shot up 20% in the U.S., as growth in store pickup and home deliveries and gains with upper-income shoppers boosted results. But its outlook disappointed Wall Street.

In the fiscal year ahead, the discounter said it expects net sales to grow 3% to 4% and adjusted operating income to increase between 3.5% to 5.5% on a constant currency basis. The company said that includes a 150 basis point, or 1.5 percentage point, headwind from acquiring smart TV company Vizio and following a leap year in 2024. For the just completed fiscal year, Walmart posted adjusted operating income growth of 9.7% on a constant currency basis.

The company also said it expects full-year adjusted earnings of $2.50 to $2.60 per share, which includes a 5 cent per share headwind from currency. That fell short of the $2.76 per share Wall Street had expected.

In an interview with CNBC, Chief Financial Officer John David Rainey described consumer spending patterns as “steady” and said “there’s not any sharp changes that we’ve seen.”

Yet he acknowledged “there’s far from certainty in the geopolitical landscape.” 

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