San Francisco Frontiers - Walmart sales rise but shares tumble on forecast

Shares of the retail behemoth fell around eight percent in pre-market trading after the company projected annual profits of between $2.50 and $2.60 a share in fiscal 2026, below the $2.77 expected by analysts.

The company sees three to four percent annual sales growth, lower than the 5.1 percent last year.

In its US division, Walmart pointed to "broad-based sales momentum" as it scored increased comparable sales despite a shorter-than-usual holiday shopping season.

Walmart said its biggest market share gains were in upper-income households, extending a period of growth for this category. The chain's reputation for low prices has pulled in more consumers in a period of inflation.

The company achieved sales growth in the United States in grocery and "health and wellness," which includes pharmacy.

But in a sign that inflation has moderated, Walmart also said it achieved higher general merchandise sales as consumers boosted purchases of discretionary items.

Overall profits dipped 4.4 percent from the year-ago level to $5.3 billion, while revenues rose 4.1 percent to $180.6 billion.

The results show Walmart's momentum "is still going strong," GlobalData analyst Neil Saunders said in a note.

"We continue to track more switching to Walmart from other retailers –- especially for products like household goods where consumers are eager to save money," he said.

Saunders acknowledged disappointment with Walmart's sales projection, but characterized it as "a solid forecast which continues to build on a very successful period of expansion."

B.Johnson--SFF