Image Source: Walmart
By Brian Nelson, CFA
On February 19, Walmart (WMT) reported better than expected fourth quarter fiscal 2026 results with both revenue and non-GAAP earnings per share beating the consensus forecast. Revenue increased 5.6% in the quarter and 4.9% in constant currency. Walmart U.S. comp sales increased 4.6% in the quarter.
Global eCommerce sales grew 24% thanks to strength in store-fulfilled pickup & delivery and marketplace. Its global advertising business advanced 37%, including VIZIO, while Walmart Connect in the U.S. was up 41%. Membership fee revenue grew 15.1% globally.
Walmart’s gross margin rate was up 13 basis points thanks to strength in Walmart U.S., while operating income was up $0.8 billion, or 10.8%, growing faster than sales. Adjusted earnings per share came in at $0.74 in the quarter.
Management had the following to say about the results:
The pace of change in retail is accelerating. It’s exciting. And our financial results show that we’re not only embracing this change, we’re leading it. For our customers and members, the future is fast, convenient, and personalized.
Walmart ended the year with cash and cash equivalents of $10.7 billion and total debt of $51.5 billion. For the fiscal year, operating cash flow of $41.6 billion, an increase of $5.1 billion, while free cash flow was $14.9 billion, an increase of $2.3 billion. It ended the fiscal year with inventory of $58.9 billion, an increase of $2.4 billion, or 4.3%.
Looking to the first quarter of fiscal 2027, management expects net sales to increase 3.5%-4.5%, operating income to advance 4%-6%, and adjusted earnings per share of $0.63-$0.65. For fiscal 2027, net sales are expected to advance at a 3.5%-4.5% pace, with operating income jumping 6%-8% on the year. Adjusted earnings per share is targeted in the range of $2.75-$2.85, with capital expenditures estimated at 3.5% of net sales. Shares yield 0.7% at the time of this writing.
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Brian Nelson owns shares in SPY, SCHG, QQQ, QQQM, DIA, VOT, RSP, and IWM. Valuentum owns SPY, SCHG, QQQ, QQQM, VOO, and DIA. Brian Nelson’s household owns shares in HON, DIS, HAS, NKE, DIA, RSP, SCHG, QQQ, QQQM, and VOO. Some of the other securities written about in this article may be included in Valuentum’s simulated newsletter portfolios. Contact Valuentum for more information about its editorial policies.
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