Walmart Stock Tumbles Despite Strong Holiday Sales
Retail giant Walmart saw its stock price plummet by over 6% in morning trading on Tuesday, despite reporting robust financial results for the quarter ending January 31. The drop came as the company issued conservative sales guidance for the upcoming year, citing market unpredictability.
Walmart anticipates net sales growth of 3% to 4% and adjusted operating income growth of 3.5% to 5.5% for the fiscal year 2025. CFO John David Rainey emphasized a cautious outlook, stating, “We’re taking a measured approach given the unpredictable nature of the current market.”
Despite the stock market’s reaction, Walmart’s financial performance for the past quarter was strong. Total revenue rose by 5.3% to $180.5 billion, surpassing analyst expectations. Global e-commerce sales saw a significant boost, increasing by 16% during the holiday season, with US sales up 20% year over year.
In response to the market reaction, Rainey announced plans to increase stock buybacks. “We believe our stock represents an attractive investment opportunity,” he said.
US consumers have remained resilient, with a focus on value and convenience driving Walmart’s growth. The company has achieved 93% coverage of US households with same-day delivery, with a significant portion of customers opting for expedited delivery options.
Rainey acknowledged potential impacts from geopolitical factors, such as tariffs, but emphasized the company’s efforts to maintain low prices for consumers.
Walmart’s CEO, Doug McMillon, remained optimistic about the company’s market position. “We’re gaining market share and maintaining a healthy top line,” he stated. This contrasts with rival Target, which recently cut its profit guidance.
Neil Saunders, an analyst from GlobalData, noted Walmart’s substantial revenue increase since 2019, highlighting its dominance in the US market. “Walmart’s focus on value and low prices continues to attract consumers, including higher-income segments,” Saunders commented.
As Walmart navigates an uncertain economic landscape, its ability to adapt and maintain its value proposition will be crucial in sustaining growth and market share in the competitive retail sector.
