Walmart CFO Allays Concerns About Future Performance
Walmart's (WMT) Chief Financial Officer, John David Rainey, has sought to address investor concerns that 2025 may not be as strong as previous years. "They're conflating our guidance with... maybe suggesting that we're feeling like things aren't as good, or the economy is softer," Rainey stated to Yahoo Finance. "Let me be very clear: That's not the case. We feel really good about how we're doing."
Despite strong quarterly results, shares of Walmart fell over 6% on Thursday after the company issued conservative fiscal year 2026 guidance. The guidance projected a 3%-4% increase in net sales, in line with its previous target of 4% annual growth. However, it fell short of Wall Street estimates of up to 4.2% and the 5.6% sales growth achieved in 2025.
Rainey attributed the guidance to uncertainties regarding tariffs and the macroeconomic environment. He emphasized that the company performed well in January but adopted a prudent approach. Inflationary benefits that boosted Walmart's revenue in recent years are also expected to be lower.
Shares of other retailers, including Costco (COST), Dollar General (DG), Dollar Tree (DLTR), and Target (TGT), also declined following Walmart's announcement.
Analysts noted that high expectations for Walmart's earnings report may have contributed to the stock's decline. Despite the guidance, Walmart's "newer businesses are growing rapidly and contributing to profits," according to Joe Feldman of Telsey Advisory Group.
Oliver Chen of TD Cowen highlighted the company's high price-to-earnings (P/E) ratio of 38 times, indicating high growth expectations. However, Chen remained optimistic, stating that the guidance was conservative and in line with Walmart's past practices.
Buying Opportunity for Investors
Analysts saw the stock's decline as a potential buying opportunity. Michael Baker of D.A. Davidson stated that Walmart's "valuation doesn't matter as much" due to its strong fundamentals and its importance as a benchmark for investors.