San Francisco Frontiers - Walmart results expected to highlight big plans for AI

The results cover the crucial fourth quarter comprising the holiday shopping season and will be the first with Chief Executive John Furner, who ascended to the top post on February 1 after previously leading the company's giant US division.

Solid earnings from the big-box chain in recent quarters have underscored growing popularity with wealthier US consumers, as well as with less prosperous consumers in its home market, where some 90 percent of the population lives within 10 miles of a company location.

Analysts expect modestly higher quarterly profits to conclude a year of nearly five percent revenue growth to more than $700 billion.

Walmart on February 3 overtook the $1 trillion valuation marker, a rare occurrence for a brick-and-mortar legacy company that began as a family store in Arkansas in 1962.

Just three other non-tech companies have achieved this valuation: oil giant Saudi Aramco, Warren Buffett's conglomerate Berkshire Hathaway, and pharma company Eli Lilly.

"Investors have sort of put companies like Walmart, Costco and Amazon into one bucket and the rest of the retailers are in a slower-growth bucket," said Arun Sundaram, a senior equity analyst at CFRA Research.

Walmart announced late last year that it was shifting its stock listing from the New York Stock Exchange to the Nasdaq.

"Moving to Nasdaq aligns with the people-led, tech-powered approach to our long-term strategy," Walmart Chief Financial Officer John David Rainey said of the move.

"Walmart is setting a new standard for omnichannel retail by integrating automation and AI to build smarter, faster, and more connected experiences for customers," he added.

- AI agents -

When Walmart last reported results in November, executives described the overall impact of President Donald Trump's tariffs as somewhat more muted than initially feared.

"We continue to benefit from higher income families choosing to shop with us more often," said former CEO Doug McMillion. "While lower income families have been under additional pressure of late, we're encouraged by how our teams are meeting them with greater value across categories."

The company benefited from strong e-commerce growth and from gains in its overseas markets, including China where Walmart now has 60 Sam's Club locations.

Executives said they had reduced shipping costs through automation and pointed to the announcement of a partnership with OpenAI that lets consumers make purchases through ChatGPT.

Walmart in January also announced an AI venture with Google, whereby consumers can turn to the Gemini program for products.

Walmart executives have touted the potential for AI to provide greater personalization for consumers and help with analyzing vast amounts of data to better manage inventory.

There is also greater talk of "agentic commerce" where AI assumes more sophisticated tasks, such as executing weekly supermarket orders based on a consumer's history or searching the Internet for the right goods for a holiday meal or a party.

These advances offer both opportunities and risks for retailers, said a CFRA report from last fall.

"For consumers, agentic commerce should save both time and money," CFRA said. "However, for retailers and suppliers, the implications are more nuanced, given the likelihood of reduced direct interaction with customers and more engagement with other AI agents."

A note from UBS predicted that Thursday's earnings announcement would support a "bull" case for Walmart, pointing to key executive appointments as evidence of the company's stands "well poised to take its modernization further."

These include the choice of David Guggina to succeed Furner as head of Walmart's US division. Guggina most recently led e-commerce at Walmart US. Before that, he worked on Walmart's supply chain and spent 10 years in leadership roles at Amazon.

"The retailer expects e-commerce to disproportionately drive its growth," UBS said, adding that Guggina "has the background and the skill set to lead this effort."

W.Carter--SFF