Walmart fourth-quarter earnings beat expectations but full-year guidance falls short of forecasts amid cautious consumer spending outlook and economic uncertainty

Walmart reported fourth-quarter earnings that exceeded Wall Street expectations, with adjusted earnings per share of $0.74 against an expected $0.73 and revenue of $190.7 billion compared to the $190.5 billion analysts had projected. However, the company issued full-year guidance that fell below consensus forecasts, expecting adjusted EPS between $2.75 and $2.85, less than the $2.97 analysts anticipated, and sales growth of 3.5% to 4.5% year over year, compared to analyst forecasts of about 5%. Shares experienced volatility, falling in premarket trading before turning positive. This marks the first earnings report under new CEO John Furner.

Walmart executives cited a desire to remain cautious amid an uncertain macroeconomic backdrop, noting subdued consumer sentiment and reduced hiring as reasons for conservative full-year guidance. CFO John Rainey stated, “Our goal is to outperform this guidance, but we believe it’s prudent to start the year with a level of conservatism given the backdrop is still somewhat unstable.”

Analysts observed that Walmart has a history of setting conservative guidance, which can increase the likelihood of management exceeding outlooks. DA Davidson analyst Michael Baker commented, “The 2026 and 1Q guidance are both below the Street, but we are not overly concerned about that as we suspect that WMT wants to set a beatable bar.” He added, “It’s not surprising that Walmart sets a lower bar for a new CEO.” Expectations were high leading up to the release, with the retail giant having already gained over 13% since the start of the year and recently reaching a $1 trillion valuation.

For the full year, Walmart reported revenue of $713.2 billion, slightly trailing Amazon's $716.9 billion, marking the first time the retailer has been surpassed by its online-native rival in annual sales. Both companies have diverse revenue streams beyond their core retail operations.

In other financial news, buy now, pay later company Klarna saw its shares tumble after its first-quarter outlook came in below analyst projections. Management projects Q1 revenues between $900 million and $980 million, with the midpoint below Wall Street's call for $965.1 million. The company's gross merchandise value range for the current quarter, $32 billion to $33 billion, also fell below the consensus estimate of $33.37 billion. Gross merchandise value represents the total dollar amount of all purchases made through Klarna's payment methods.

These disappointing forward-looking statements overshadowed Klarna's solid fourth-quarter results. Revenues of $1.08 billion exceeded expectations by $10 million, gross merchandise volume beat estimates at $38.7 billion (consensus: $38.06 billion), and active consumers reached 118 million, nearly a million more than Wall Street had projected. The stock was poised to open at an all-time low.

Palantir's stock was lower in premarket trading following news of its removal from Bank of America’s US 1 List, a selection of top "buy"-rated investment ideas. This development, along with other factors, suggests a significant shift in investor sentiment towards the AI retail company. Palantir recently traded at its largest discount to Wall Street's average price target since late 2022.

Herbalife shares were soaring in premarket trading after announcing that Cristiano Ronaldo has invested $7.5 million into one of its subsidiaries. The football star acquired a 10% equity interest in Herbalife’s HBL Pro2col, committing to providing services and sponsorship rights to the entity. Pro2col offers personalized health and wellness advice based on user data, wearable technology, and DNA analysis. Herbalife reached a deal to acquire these assets in March 2025, at which time Ronaldo was named an advisor to support the technology's development and deployment. He has endorsed Herbalife products since 2013. This announcement coincided with Herbalife's fourth-quarter earnings release, which were mixed to largely in line with estimates.

Used car retailer Carvana experienced a significant drop in its stock price after its fourth-quarter profits fell short of estimates. Adjusted EBITDA of $511 million was below the consensus call for $535.7 million, which more than offset better-than-expected sales of $5.6 billion against an estimate of $5.27 billion. Carvana sold 163,522 used vehicles to retail customers in the quarter, a 43% increase from the previous year and ahead of expectations. This sales volume further narrows the gap with rival Vroom, which sold 169,557 vehicles in its most recent quarter. Carvana reported a retail gross profit per vehicle of $3,076, a decrease of 7.7% from the same period last year.

In a letter to shareholders, Carvana attributed the decline in retail gross profit per unit to higher-than-expected reconditioning costs in the fourth quarter. Lower shipping fee revenue, increased non-vehicle costs, and higher industrywide retail depreciation rates also contributed to the decrease. The company anticipates elevated reconditioning costs to continue into the first quarter but expects a sequential increase in retail gross profit per unit. Carvana projects significant growth in both retail units sold and Adjusted EBITDA for the first quarter and the full year ahead. As of Wednesday's close, Carvana shares had declined approximately 24% from their all-time closing high in January, following a report from short seller Gotham City that questioned its accounting practices. A Carvana spokesperson stated that the report was “inaccurate and intentionally misleading.”