Walmart has reported its fourth-quarter earnings for fiscal year 2025, revealing a revenue of $180.6 billion and an operating income of $7.9 billion. Comparable U.S. sales increased by 4.6%, with global e-commerce sales growing by 16% and global advertising revenue up by 29%. Despite these positive figures, the company’s guidance for the first quarter of fiscal 2026 anticipates earnings per share between $0.57 and $0.58, with sales growth of 3% to 4%, which is below analyst expectations. For the full fiscal year 2026, Walmart projects earnings per share in the range of $2.50 to $2.60. Following the release of this cautious outlook, Walmart’s stock experienced a decline of approximately 6.5%. The company has also announced a 13% increase in its annual dividend, marking its largest raise in a decade. Walmart’s performance has been bolstered by attracting higher-income shoppers and expanding its e-commerce and advertising sectors.
However, concerns about consumer spending and the impact of ongoing trade policies have contributed to a conservative forecast for the upcoming fiscal year.
Walmart’s Growing Revenue Streams Beyond Retail
Walmart is expanding its revenue sources beyond traditional retail, following a strategy similar to Amazon. The company’s newer business segments contributed significantly to its strong fourth-quarter performance, particularly in advertising, marketplace sales, and fulfillment services.
Key Growth Drivers:
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Advertising & Marketplace Expansion:
- Walmart’s global advertising revenue surged 29%, with Walmart Connect seeing a 24% increase.
- Its third-party marketplace and fulfillment services also achieved double-digit growth, improving profit margins compared to retail operations.
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Membership Income Growth:
- Walmart’s membership revenue grew 16% year over year, driven by Walmart+ and Sam’s Club.
- The success of these programs highlights increasing consumer interest in subscription-based benefits.
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E-Commerce & Express Deliveries:
- Improved delivery density has made Walmart’s e-commerce operations more efficient and profitable.
- Over 30% of customers opting for store deliveries paid an extra fee for faster service, with 77% of Christmas Eve orders being express deliveries completed within two hours.
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Pharmacy Delivery Expansion:
- Launched in six states in October, Walmart’s pharmacy delivery service has now expanded nationwide.
- Customers frequently add groceries and other essentials to their prescription orders, boosting sales.
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Dividend Increase & Stock Performance:
- Walmart raised its dividend by 13% to $0.94 per share, the highest increase in over a decade.
- As of this week, Walmart’s stock has climbed 15% this year, outperforming the S&P 500’s 4% gain. Over the past year, shares have risen by 83%.
With these high-margin and fast-growing business segments, Walmart is positioning itself for sustained profitability while adapting to changing consumer habits and digital trends.
While Walmart delivered a strong Q4 performance, its cautious guidance for fiscal 2026 indicates potential challenges ahead. Investors are closely monitoring the retailer’s ability to navigate economic headwinds and sustain its momentum in digital transformation.
