Walmart Guidance Tempers Gains, Wayfair Slides on Mixed Q4

Guidance and momentum are driving the reaction more than the quarter itself.

Walmart (WMT) reported solid fourth-quarter results, raised its dividend, and authorized a $30 billion share repurchase program, though softer full-year guidance tempered enthusiasm. Wayfair (W) delivered an adjusted earnings beat and revenue growth but saw shares fall as investors weighed margin trends and a non-adjusted loss.

Key Points

• Walmart (WMT) beat Q4 estimates, raised its dividend, and authorized a $30 billion share repurchase, but issued softer full-year guidance.
• Wayfair (W) topped adjusted earnings expectations, yet shares fell on weaker non-adjusted results and margin concerns.
• Both retailers highlighted shifting consumer behavior and ongoing investment in technology and AI.

Walmart Delivers Solid Quarter, Cautious Outlook

Walmart (WMT) reported fourth-quarter revenue of $190.7 billion, up 5.6% year over year and slightly above expectations of $190.5 billion. Adjusted earnings per share came in at 74 cents, ahead of projections for 73 cents.

The company announced a new $30 billion share repurchase authorization, its largest ever, and raised its annual dividend to 99 cents per share, marking its 53rd consecutive year of dividend increases.

However, full-year guidance fell short of Wall Street expectations. Walmart expects fiscal-year sales growth between 3.5% and 4.5%, compared with projections closer to 5%. Adjusted earnings per share are forecast between $2.75 and $2.85, below the $2.97 analysts had anticipated.

First-quarter guidance was also conservative, with projected earnings between 63 cents and 65 cents per share, under the consensus estimate of 68 cents.

What Is Driving Walmart’s Strategy?

This was the first earnings report under new CEO John Furner. Management emphasized a balanced posture amid ongoing trade uncertainty and shifting consumer behavior.

Walmart U.S. comparable sales, excluding fuel, rose 4.6%, led by strength among households earning over $100,000. Lower-income consumers remain more pressured, with some managing spending paycheck to paycheck.

E-commerce sales grew 24% year over year, and advertising revenue increased 37%, reflecting the company’s expanding digital ecosystem. Executives also pointed to artificial intelligence initiatives, including the Sparky chatbot, which roughly half of app users have engaged with. Customers using Sparky saw basket sizes rise by about 35%.

Management noted that fiscal 2027 will mark peak investment spending tied to supply chain automation and store remodels.

Wayfair Beats on Adjusted Earnings, Shares Slide

Wayfair (W) reported adjusted earnings of 85 cents per share for the fourth quarter, exceeding expectations for 69 cents. Revenue increased 6.9% year over year to $3.34 billion, slightly above estimates.

Despite the adjusted earnings beat, the company posted a non-adjusted loss of 89 cents per share, impacted by equity-based compensation and a $165 million loss related to a debt repurchase.

Total active customers declined 0.5% year over year to 21.3 million at the end of 2025, though new customer growth continued for a third consecutive quarter.

Adjusted EBITDA more than doubled year over year to $224 million, with a 6.7% margin. For the first quarter, Wayfair expects mid-single-digit revenue growth and an adjusted EBITDA margin between 4.5% and 5.5%.

Management acknowledged that the housing market remains sluggish and that lower-income consumers face greater strain. The company also highlighted AI investments aimed at automating customer service and enhancing shopping experiences.

Why Did Wayfair Shares Fall Despite the Beat?

While Wayfair exceeded adjusted earnings expectations, some operating metrics softened compared with prior quarters.

Order growth slowed to 3%, down from 5% in the previous quarter. Contribution margin stepped down sequentially to 15.3% from 15.8% in Q3. Management also indicated that gross margins could dip slightly below 30% later in 2026 to capture market share.

Investors appeared to focus on the sequential slowdown and margin flexibility rather than the headline earnings beat.

What It Means for Investors

The stock market reaction to WMT and W highlights how guidance and forward-looking commentary can outweigh quarterly beats.

Walmart’s fundamentals remain solid, with steady comparable sales, strong digital growth, and shareholder returns through dividends and buybacks. However, its conservative outlook and peak investment cycle tempered enthusiasm.

Wayfair demonstrated profitability progress on an adjusted basis but continues to navigate a soft housing backdrop and margin trade-offs as it invests in growth.

In both cases, investors are closely monitoring consumer behavior, technology integration, and margin trends rather than simply headline earnings.

Conclusion

Walmart and Wayfair both delivered notable fourth-quarter results, but their stock reactions diverged. Walmart’s cautious guidance offset a strong operational print, while Wayfair’s adjusted earnings beat was overshadowed by softer trends and non-adjusted losses. The market’s focus remains squarely on forward momentum and margin durability.

FAQs

Did Walmart beat earnings expectations?
Walmart narrowly beat fourth-quarter adjusted earnings and revenue estimates.

Why did Walmart stock waver after earnings?
Walmart stock wavered because full-year and first-quarter guidance came in below Wall Street expectations.

What major shareholder action did Walmart announce?
Walmart authorized a new $30 billion share repurchase program and increased its annual dividend to 99 cents per share.

Did Wayfair beat earnings expectations?
Wayfair beat adjusted earnings expectations but reported a larger-than-expected non-adjusted loss.

Why did Wayfair stock decline despite strong revenue growth?
Wayfair stock declined as investors focused on softer order growth, margin trends, and a non-adjusted loss impacted by debt repurchase costs.

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