Walmart (NYSE: $WMT), a giant retailer that sells an assortment of products and offers money transfers, money orders, and bill pay, released its Q4 Fiscal 2025 results on Thursday, February 20, 2025. It beat revenue and earnings forecasts, but the stock sank over 8% in premarket trading. Here is a deep dive into why WMT sank after Q4 results.
Walmart Releases Q4 Results
In the fourth quarter, Walmart reported revenue of $180.6 billion, a 4.1% YoY increase, and above estimates of $179.85 billion. Its Q4 adjusted EPS came in at $0.66, beating estimates of $0.064.
The company reported a gross margin of 23.9%, a 53-basis point increase from last year on a gross profit of $42.66 billion, while the adjusted operating income came in at $7.9 billion, a 9.4% YoY income.
Meanwhile, global eCommerce sales were up 16%, while the global ad business grew 29%, including a 24% increase for Walmart Connect in the US.
Full-Year Highlights
Full-year revenue came in at $681 billion, a 5.1% YoY increase, while the global ad business saw a 27% increase in fiscal 2025 to $4.4 billion. The full-year adjusted operating income grew 9.7% to $29.7 billion, while the full-year gross margin was up 40 basis points to 24.1% on a gross profit of $162.78 billion. It ended fiscal 2025 with an adjusted EPS of $2.51.
Walmart also announced it had raised annual dividend by 13% to $0.94 per share, marking the biggest increase in more than a decade.
Q1 And Fiscal 2026 guidance
For the first quarter of fiscal 2026, Walmart expects net sales to increase 3% to 4%, while the adjusted operating income is expected to increase 0.5% to 2%. The company forecast an adjusted EPS of $0.57 to $0.58.
For fiscal 2026, Walmart expects net sales to rise 3% to 4% YoY, while the adjusted operating income is expected to rise 3.5% to 5.5%. Meanwhile, it forecasts an adjusted EPS of $2.5 to $2.6, below the $2.76 forecast by analysts. Full-year capital expenditures are expected to be 3% to 3.5% of net sales.
Walmart (WMT) Sinks After Q4 Results
Following Walmart’s forecast of slower growth in fiscal 2026, the stock took a sharp dive, falling 8.39% in premarket trading to $95.27 as of 8:17 AM EST. However, Walmart is still up 41.07% in the past six months, and 83.14% in premarket trading, outperforming the overall market.
Analysts are optimistic about the stock’s future, giving it an overall strong buy rating. They forecast an average price of $112.30, which is a 7.98% upside based on Wednesday’s closing price. The highest price forecast for the stock is $120, while the lowest is $94.
Should You Add Walmart To Your Portfolio In 2025
While growth is likely to slow down in fiscal 2026, Walmart is still America’s largest grocery store, a title that it is likely to hold for a long time. As such, while it might face some headwinds in the medium term, its long-term prospects still look promising. Consequently, adding WMT shares to your portfolio could potentially pay off, especially when coupled with the company’s recent dividend increase.
Click Here For Updates on WMT – It’s FREE to Sign Up for Text Message Notifications!
Disclaimer: This website provides information about cryptocurrency and stock market investments. This website does not provide investment advice and should not be used as a replacement for investment advice from a qualified professional. This website is for educational and informational purposes only. The owner of this website is not a registered investment advisor and does not offer investment advice. You, the reader / viewer, bear responsibility for your own investment decisions and should seek the advice of a qualified securities professional before making any investment.