Big Discounts, Small Certainty: Walmart’s Strong Quarter and a Cautious Road Ahead

CNBC, Bloomberg, NBC News, Axios, Investor’s Business Daily, Business Insider, and AP contributed to this report.

Walmart’s holiday sprint looked like a win: shoppers showed up, online orders soared, and the company walked away with solid numbers. But underneath the celebration was a steady, careful note from management: things could get bumpy. The quarter was strong. The outlook was measured. Same-store momentum met cautious language. You can feel both at once.

Walmart rode a wave of shoppers who wanted low prices and fast delivery over the holiday stretch. That combo—value plus speed—pulled in a wider crowd than usual, from households watching every grocery bill to wealthier buyers clicking through fashion and electronics. The result: sales grew and e-commerce kept firing on all cylinders. But executives left investors with a muted forecast, arguing that being big means staying nimble.

“We want to maintain maximum flexibility and not get out ahead of ourselves at this point in the year,” said John David Rainey during the earnings call, flagging weak consumer sentiment, a shaky jobs picture, and trouble tied to student loan delinquencies. In plain English: the company is doing well, but it sees risk.

Numbers first. For the fiscal fourth quarter ended Jan. 31, Walmart reported revenue of $190.7 billion, up about 5.6% from a year earlier, and adjusted earnings per share of $0.74—just a hair above Street estimates. Net income fell compared with a year ago, to $4.24 billion (or $0.53 per share), but the topline beat mattered. Comparable US sales rose 4.6% (excluding fuel), and U.S. e-commerce jumped 27%—helped, importantly, by store-fulfilled pickup and delivery.

That pickup-and-delivery engine is increasingly Walmart’s backbone. Faster deliveries—orders arriving within three hours—now make up a meaningful slice of online volume, and executives said those speedy options are helping convert shoppers who might otherwise go elsewhere. The company reported that digital sales now account for a record share of US sales—roughly 23%—and its marketplace and ad business are pulling more weight, too.

There’s another headline tucked inside the quarter: for the first time in years, Walmart ceded the top spot in annual revenue to Amazon. Amazon posted $716.9 billion in net sales for its fiscal year, edging past Walmart’s $713.2 billion. It’s a symbolic moment more than an existential crisis—Amazon’s numbers lean heavily on cloud computing and digital services—but it underscores the scale and changing composition of the retail battlefield.

And the corporate handoff matters. This was the first full earnings print tied to the incoming CEO, John Furner, who officially took the reins Feb. 1. He steps into the job after steering the US unit and will likely keep steering the tech-forward playbook his predecessor, Doug McMillon, helped build: better supply chains, more digital muscle, and bets on advertising and marketplace fees to juice margins.

Investors cheered some milestones: the stock has climbed sharply over the past year, and Walmart crossed the $1 trillion valuation mark earlier this year. Management sweetened the pot by unveiling a new $30 billion share-buyback program, replacing an older $20 billion authorization. Not bad for a company with aisles full of groceries and a global logistics network.

So why the careful tone? Two reasons stand out.

First, economics. Walmart’s leadership sees a mixed consumer picture. High earners—those with household income north of $100,000—are actually driving a lot of the incremental spending, especially in categories like fashion. At the same time, households under $50,000 are feeling the squeeze: paycheck-to-paycheck pressure, stretched wallets, and tight budgets. That split—wealthier shoppers spending more while lower-income households pull back—tracks with what economists call a K-shaped recovery. It benefits some and leaves others behind.

Second, costs and policy. Tariffs and supply-chain shifts continue to complicate pricing. Average prices for identical items at Walmart rose just above 1% in the quarter, with food slightly lower and general merchandise higher—more than 3% in some categories, according to the CFO. Products that are largely imported—think TVs and household electronics—have been tougher to manage. The company says it has absorbed some tariff-related costs, adjusted assortments, and diversified sourcing to blunt the hit to customers. Still, those pressures make forward guidance trickier.

Which brings us back to the outlook. For the coming quarter management guided to sales growth of roughly 3.5% to 4.5% and adjusted EPS in the mid-60-cent range. For the full year, Walmart’s forecast nudged toward $706.4 billion in sales and an EPS figure that some analysts saw as conservative. Wall Street had penciled in slightly stronger numbers—so the muted tone nudged the stock and had investors thinking about the margin for error.

Under the surface, Walmart’s strategy looks like this: keep prices low, broaden appeal, and build higher-margin, tech-driven revenue streams. The retailer is leaning into advertising, marketplace fees, and AI tools to drive efficiency—Sparky and other initiatives play a role in nudging order sizes and smoothing fulfillment. Executives argue that this is how Walmart defends against Amazon: scale in stores, speed in delivery, and growing digital monetization.

Two other things to watch. One, the composition of the customer base. If high-income shoppers keep supplying growth, Walmart’s narrative shifts: it’s not just a discount grocer for budget-conscious families; it’s a broader retail platform. That’s good for margins. Two, whether inflation and tariff dynamics normalize. Management says tariff-driven inflation has likely peaked; if so, that removes a big uncertainty. If not, the company may have to keep balancing price and supply in ways that squeeze margins or force price increases.

Retailers often sit at the front of the economic line: customers vote with carts every week, and Walmart’s mammoth footprint—more than 150 million stores or online visits weekly, the company says—makes it a pretty honest thermometer for how people are spending. This quarter showed resilience. It also showed cracks.

Here’s the bottom line: the holiday haul was impressive. Walmart kept winning share, the digital engine hummed, and the firm remains a retail giant with growing tech chops. But leadership’s tone was deliberate. Big companies that know they’re linked to the health of American consumers don’t promise miracles when the macro feels shaky. They flexibility instead.

If you’re watching for clues about the economy, watch Walmart’s next moves: pricing, inventory decisions, AI rollouts, and whether high-income shoppers keep carrying the load. Those will tell us whether this is a durable new picture of retail or a temporary reprieve before a tougher stretch. Either way, the company’s mix of low prices and faster deliveries remains the story—and the company knows it can’t afford to get comfortable.