Walmart Stock Slumps As Retailer Echoes Consumer Spending Caution After Q4 Earnings Beat

Walmart echoed Home Depot's caution on consumer spending strength Tuesday, sending shares of the world's largest retailer sharply lower in pre-market trading.

Walmart  (WMT) - Get Free Report shares moved sharply lower Tuesday after the world's largest retailer posted better-than-expected fourth quarter earnings but issued a muted full-year profit forecast as it cautioned that consumers will continue to spend conservatively in a slowing economy.

Walmart said adjusted earnings for the three months ended in December came in at $1.71 per share, up 11.8% from the same period last year and well ahead of the Street consensus forecast of $1.51 per share.

Group revenues, Walmart said, were tabbed at $164.0 billion, an 7.3% increase from last year that again topped analysts' estimates of $159.72 billion. U.S. same-store sales rose 8.3% from last year, the company said, firmly topping the Refinitiv forecast of 5.8%.  

Looking into the retailer's fiscal first quarter, which ends in April,, Walmart said it sees adjusted earnings of between $1.25 and $1.30 per share with sales rising between 4.5% and 5%. For the full year, sales will likely rise 2.5% to 3% from 2022 levels, with Walmart forecasting earnings of between $5.90 and $6.05 per share.

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"We’re excited about our momentum. The team delivered a strong quarter to finish the year, and as our results in the last two quarters show, they acted quickly and aggressively to address the inventory and cost challenges we faced last year," said CEO Doug McMilon. "We built momentum in the third quarter and that continues. We are well-positioned to start this fiscal year."

Walmart shares were marked 3.75% lower in pre-market trading immediately following the earnings release to indicate an opening bell price of $140.94 each.

Earlier Tuesday, Home Depot  (HD) - Get Free Report also posted better-than-expected fourth quarter earnings but cautioned that 2023 profits will likely be flat to last year's levels as consumers reign in spending amid persistent inflation pressures.