Walmart CEO Furner begins tenure with conservative outlook

In this file photo, the logo for Walmart appears above a trading post on the floor of the New York Stock Exchange. (AP Photo/Richard Drew, File)

Walmart forecast annual sales and profit below elevated expectations on Thursday as it enters a new chapter under CEO John Furner, even as investments in online delivery and its push to keep prices low drew shoppers during the holiday quarter.

Analysts were expecting some caution in the company’s projections for the year as Furner enters his first quarter at the helm. Its expectation for 3.5 per cent to 4.5 per cent growth for the coming year is similar to its initial outlook for the year that just ended.

While other consumer companies have struggled with customers balking at higher-priced items, Walmart has posted strong sales in recent quarters, in large part due to an increasingly richer customer base.

That held true for the most recent quarter, as e-commerce contributed more to the company’s comparable sales. Overall revenue rose 5.6% for the quarter to US$190.66 billion, a smidge ahead of expectations.

“The pace of change in retail is accelerating... For our customers and members, the future is fast, convenient, and personalized,” Furner said in a statement. The company also announced a fresh $30 billion share buyback plan.

The Furner era

Markets have cheered Furner’s appointment, following his leadership of Walmart’s U.S. business through the pandemic and his efforts to adapt to AI‑driven changes ahead of rivals. Walmart’s U.S. unit, now led by David Guggina, accounts for nearly 70 per cent of its annual revenue.

The company’s stock has been a consistent outperformer, with gains of 22 per cent over the last year that made it the first retailer to exceed $1 trillion in market value. Walmart’s shares were down 2.6 per cent in premarket trading.

As one of the first major U.S. chains to shed light on the crucial holiday quarter, Walmart’s results reveal how Americans have responded to U.S. President Donald Trump’s tariffs on countries such as China, where a large portion of U.S. holiday goods are produced.

U.S. retail sales excluding automobiles, gasoline, building materials and food services eased 0.1% in December after a 0.2 per cent gain in November, suggesting consumers have retrenched due to the higher cost of goods, partly due to import tariffs.

However, Walmart has stayed unscathed, reporting a 4.6 per cent increase in U.S. same-store sales for the fourth quarter, which includes November, December and January.

Analysts were expecting a rise of 4.2 per cent. Data provided by shopper traffic tracker Placer.ai showed visits to Walmart’s 4,600 stores rose in every month of the quarter.

The retail giant’s dominance in groceries and its ability to secure the lowest prices from suppliers have made it a popular choice for value-conscious shoppers across income groups.

Ecommerce shines

For the past two years, the Bentonville, Arkansas-based chain’s gain in market share has been driven by households earning more than $100,000. They have also bolstered its online sales, thanks to same-day and two-day deliveries and curbside pickup services.

Walmart’s U.S. online sales rose 27 per cent in the quarter, its 15th straight quarterly double-digit increase. The new shoppers have helped boost sales of higher-margin items such as clothing, kitchen appliances, furniture and toys.

Sales through expedited store-fulfilled delivery channels grew more than 50% in the quarter, the company said.

The world’s largest retailer expects consolidated net sales for the fiscal year 2027 to rise between 3.5 per cent and 4.5 per cent, compared with analysts’ expectations of a roughly five per cent increase, according to data compiled by LSEG.

It forecast adjusted earnings per share of $2.75 to $2.85, below expectations of $2.96.

(Reporting by Siddharth Cavale in New York and Juveria Tabassum and Aishwarya Venugopal in Bengaluru; Editing by Arun Koyyur)