Walmart’s Outlook Spurs Worries Over Consumer Spending

Walmart’s softer-than-expected full-year outlook has sparked concerns about a slowdown in consumer spending, weighing down other retail stocks.

Walmart's fourth-quarter revenue rose 4.1% year-over-year to $180.6 billion but full-year adjusted earnings forecast of $2.50 to $2.60 per share fell short of analysts’ estimates. I Photo: Walmart Neighborhood Market Farmers Branch - Josey Ln  Facebook

The company projects current-year sales will increase by 3% to 4% compared to the prior year, with the lower end of that range falling short of Wall Street forecasts, Barron’s Daily reported.

Walmart executives acknowledged that while consumers' budgets remain stretched, they are still resilient and seeking value.

Higher-income households account for most of the company's recent market share gains. CEO Doug McMillon noted a continued shift in demand toward lower-margin products such as groceries and pharmacy items.

Fourth-quarter revenue rose 4.1% year-over-year to $180.6 billion, while adjusted earnings of 66 cents per share slightly exceeded expectations.

However, Walmart’s full-year adjusted earnings forecast of $2.50 to $2.60 per share fell short of analysts’ estimates.

Meanwhile, online furnishings retailer Wayfair reported a larger-than-expected fourth-quarter loss of 25 cents per share, though its revenue of $3.12 billion beat projections. Management stated that current-quarter revenue remains steady and that its gross margin forecast of 30.5% is nearly in line with expectations.

Demand remains weak amid economic uncertainty. Procter & Gamble CFO Andre Schulten warned that the company expects the business environment to be “volatile and challenging,” citing slower consumption, tariff-related volatility, and rising costs.

While P&G maintained its full-year guidance, it cautioned that external factors could lead to results “slightly below guidance.”