Walmart | Tariff and Cost Concerns

Who Sells WMT now and Why ?

In its Q4 FY25 results, Walmart reported a 4% year-over-year (Y/Y) revenue growth, reaching $180.6 billion, surpassing expectations by $1.6 billion. The company's U.S. comparable sales saw a solid 5% increase, with e-commerce standing out as a major growth driver, up 16% Y/Y and now accounting for 18% of total sales. The performance was largely fueled by higher-income households, which continue to be a key segment for Walmart’s sales growth. Additionally, global advertising revenue surged by 29%, highlighting the increasing importance of non-retail income streams for the company.

However, Walmart’s guidance for FY26 fell short of market expectations, with projected sales growth of 3%-4% and earnings per share (EPS) of $2.50-$2.60, compared to the $2.76 anticipated by analysts. Management attributed the conservative outlook to ongoing economic uncertainty and the potential for tariff impacts on costs. Despite this, Walmart’s leadership expressed confidence in exceeding initial forecasts, as has been the case in previous years, suggesting that the company’s resilience and adaptability remain key strengths.

Looking ahead, Walmart’s strategy centers on bolstering its digital footprint, expanding automation, and exploring new revenue opportunities, particularly in advertising, which includes its recent acquisition of VIZIO. The company's growing membership base is another avenue for long-term growth. Even with the near-term headwinds, such as cautious consumer spending and macroeconomic challenges, Walmart’s ability to gain market share, especially in e-commerce, and its continued focus on profitability within its digital segments position it well for sustained growth in the coming years.

Overall, while Walmart's near-term outlook is tempered by economic concerns, its strategic investments in technology, digital commerce, and advertising offer strong long-term growth potential. The company's diversified revenue streams and its ability to adapt to market shifts provide a solid foundation for continued success.