Walmart CFO Assuages Investor Concerns, Citing Strong Performance Despite Conservative Guidance
Walmart's (WMT) Chief Financial Officer, John David Rainey, has reassured investors that the company's outlook for 2025 remains positive, despite conservative guidance.
"We feel really good about how we're doing," Rainey stated. "There's nothing to read in between the lines here about some concern on the economy or our business."
Shares of Walmart initially declined over 6% following the announcement of conservative fiscal year 2026 guidance, which projects net sales growth of 3%-4%. However, Rainey attributed this guidance to prudence amidst uncertainty in the macro environment and tariffs.
The company's January performance was strong, but the team has taken a conservative approach. Despite missing Wall Street estimates and falling short of 2025's growth rate of 5.6%, Walmart will no longer benefit from the inflationary boost it experienced in previous years.
"Expectations were running high into Walmart's earnings report," said Joe Feldman of Telsey Advisory Group. "Despite strong fourth quarter results, they may have fallen short."
However, analysts remain optimistic. TD Cowen's Oliver Chen noted the high price-to-earnings (P/E) multiples, reflecting expectations of growth. Currently trading at a P/E ratio of 38 times, Walmart remains an attractive investment opportunity.
D.A. Davidson's Michael Baker sees the stock's dip as a buying opportunity, citing the company's strong fundamentals and benchmark status among investors.
"Valuation doesn't matter as much," Baker said. "It's more about just fundamentally they're performing well."