Walmart Posts Strong Yearly Profits, Stock Declines on Challenges Ahead

Customers shop at a Walmart store in Chicago, Ill., on May 18, 2023. Scott Olson/Getty Images

Walmart Inc., the nation’s largest retailer and a key bellwether for the U.S. economy, finished 2024 with robust profits and rising sales but hit a few snags in the new year as inflation and tariff concerns rile bargain-hunting shoppers.

In Thursday’s New York Stock Exchange session, Walmart stock was the biggest decliner, falling 6.53 percent to $97.21. At the closing bell, more than 51.5 million shares of the company’s stock had traded hands, three times the normal volume.

In a conference call with Wall Street analysts ahead of Thursday’s opening bell, Walmart CEO Doug McMillon said although the retailer has had strong results as profits grew faster than sales, the company is focused on lowering prices across all customer incomes.

“We’re gaining market share, our top line is healthy, and we’re in great shape with inventory,” he added. “We'll stay focused on growth, improving operating margins, and strengthening ROI [return on investment] as we invest to serve our customers and members even better.”

Still, the Bentonville, Arkansas-based retail giant’s fourth-quarter profits disappointed Wall Street. The company posted net income of $5.25 billion, or 65 cents per share, compared to $5.49 billion and 68 cents a year ago. Excluding taxes and a net loss of three cents due to equity investments and a legal settlement, fourth-quarter earnings were 66 cents per share on revenue of $180.6 billion.

On a yearly basis, the retail conglomerate reported a net income of $19.4 billion, or $2.42 per share, a 25 percent improvement compared to $15.5 million, or $1.92 per share, in the same period a year ago. Revenue for the global retailer with 10,750 locations in all 50 states and 19 countries jumped $674.5 billion, up 5 percent from a year ago.

According to Factset, Wall Street analysts had expected the Arkansas retailer to report fourth-quarter earnings of 65 cents on revenue of $180 billion. In the previous third-quarter earnings report ahead of the all-important holiday retail season, Walmart had raised its guidance for fiscal year 2025 for net sales to grow between 4.8 percent and 5.1 percent, well above the 3 percent to 4 percent increase expected for fiscal year 2026.

At Walmart U.S. operations, the retailer reported that same-store sales grew 4.6 percent in the fourth quarter, with positive growth in general merchandise but lower than the third quarter 5.3 percent growth as holiday bargains drew shoppers to stores for in-person and online deals. Same-store or comparable-store sales, a key performance metric for all retailers, evaluate growth at local Walmart and Sam’s Club locations that have been open for more than a year.

Walmart’s U.S. division also reported that its e-commerce sales grew 16 percent, led by the retailer’s pickup and delivery and online marketplace businesses. Global advertising business gained 29 percent, including 24 percent for Walmart Connect in the United States.

Sam’s Club revenue in the fourth quarter increased 5.7 percent to $23.1 billion as the company’s warehouse business saw strong sales growth at its local club and digital channels. Company officials said e-commerce sales rose 24 percent, led by club pickup and delivery services. Also, club membership at the retailer’s more than 400 Sam’s Club locations in the U.S. jumped 13 percent.

Walmart’s international business had fourth-quarter revenue of $32.2 billion, down slightly from $32.4 billion a year ago. Company officials said that operating income was flat at $1.4 billion as currency rate fluctuations negatively affected sales by $2 billion and operating income by $200 million.

In its outlook for 2025, Walmart expects earnings per share to be in the range of 57 cents to 58 cents in the first quarter, well below Wall Street expectations at 64 cents, according to Factset. The retail giant also expects a 3 percent to 4 percent increase in sales in the first quarter, between $166.35 billion and $167.97 billion, compared to analyst expectations of $167.05 billion for the three months.

For fiscal 2025, Walmart expects earnings per share in the range of $2.50 to $2.60, well below analysts’ forecast at $2.77, according to FactSet. Walmart expects yearly sales to grow between 3 percent and 4 percent to between $667.57 billion and $674.05 billion, compared to analyst expectations of $708.7 billion, according to FactSet.

Despite the global retail conglomerate’s disappointing results and challenging sales environment, Walmart shares have gained nearly 80 percent over the past 12 months, touching a 52-week high of $105.30 nearly a week ago on Valentine’s Day.

Looking ahead in the U.S. retail sector, recent Census Bureau data show retail and food service sales in January were $723.9 billion, down 0.9 percent from the holiday season in the previous quarter. Total sales for November 2024 through January 2025 were up 4.2 percent from the same period a year ago.

“Looking ahead, we expect consumer spending to remain choppy due to the high cost of living, tariff uncertainty, a less dovish outlook from the Fed, and elevated [long-term] interest rates,” KeyBanc analyst Brad Johnson told The Epoch Times via email.

During the conference call, McMillon also boasted about the northwest Arkansas retailer’s new 350-acre corporate campus that opened in January. In addition to working spaces and the company’s new executive suites, the 12-office corporate village includes a 73,000-square-foot campus childcare facility, a state-of-the-art health and fitness center, a 12-restaurant food court, and a 200,000-square-foot great hall named after the company’s founder, Sam Walton.

Eventually, over 15,000 employees will work at the campus as offices open in phases through 2025.

The Associated Press contributed to this report.