Walmart to tread with caution into 2026 as Furner-era begins

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

Investors have been upbeat about Walmart for months, but Wall Street expects the largest U.S. retailer to take a measured approach to its annual forecasts when it reports results on Thursday, as new CEO John Furner steers the company through a fragile consumer landscape.

The company’s market value recently crossed US$1 trillion, making it the first retailer to reach that milestone. Its 24 per cent gain over the last year far outpaces packaged food companies that have struggled as consumers retrench. This quarter will be the first time investors hear from Furner, who took over as the CEO at the start of the month.

“Historically management tends to be conservative when providing its initial guide for the year,” said Greg Melich, analyst at Evercore ISI. He said investors are setting a high bar, given shares are running near all-time highs.

Their outperformance has pushed its price-to-earnings valuation to about 45, higher than most of its peers. Fourth-quarter revenue is expected to come in at $190.43 billion, according to data compiled by LSEG.

Management changes

Along with Furner taking the helm, Walmart made other key management changes, including the appointment of Amazon alumnus David Guggina as president and CEO of Walmart U.S., a sign of its shifting strategy that recognizes a more tech‑driven approach.

“This is not a traditional appointment the ‘old’ Walmart would make. Though, this is a different retailer than a decade ago. It’s operating in new ways and with a different mindset,” said UBS analyst Michael Lasser.

That strategy is centered around AI-led digital transformation as it competes with Amazon.com, Costco Wholesale Corp, and Aldi.

The company has invested heavily in AI to close gaps with its largest rival, Amazon, which had a head start with its chatbot, Rufus, a Gen AI-powered shopping assistant that answers various shopping queries.

Walmart partnered with OpenAI to let customers shop through tools like ChatGPT and is using AI to enhance delivery speeds, recommendation engines and overall customer experience, boosting online sales growth.

Shoppers trade down

With a tougher economy prompting shoppers of all income brackets toward cheaper options, Walmart’s value and growing delivery service has helped with not just its core low‑income customers but a growing cohort of higher‑income households.

Walmart has had additional success through its investments in AI to streamline operations and enhance the shopping experience.

Executives have said wealthier shoppers have powered much of the retailer’s recent U.S. sales gain, even as its lower‑income base feels the squeeze. Food makers from Kraft Heinz to General Mills have flagged similar softness in demand from financially strained consumers.

In the last five years, Walmart has expanded its online marketplace to over half a billion items, launched one-hour delivery, created Walmart+ to rival Amazon Prime and built a $4-billion advertising business that has boosted margins, which have risen year-over-year for the past 10 quarters.

Traffic to Walmart stores strengthened at the end of 2025, with visits up 2.3 per cent in the fourth quarter from year ago. That momentum accelerated in January 2026, according to data from Placer.ai.

Since hitting $1 trillion in market value on Feb. 3, at least nine Wall Street brokerages have raised their target price on the stock while six have lifted their fourth-quarter profit estimate.

“We’ve heard a lot about the K-shaped consumer, but it’s even more pronounced with Walmart because these higher income consumers have more of a propensity to use technology and that has attracted consumers that would not have considered going to Walmart,” said Sarah Henry, managing director and portfolio manager at Logan Capital Management, which owns shares in Walmart.

(Reporting by Aishwarya Venugopal and Juveria Tabassum in Bengaluru; Editing by Arun Koyyur)