By Isnaini Azizah 
The retail landscape underwent a seismic shift in the final quarter of the fiscal year, as Walmart reported holiday-quarter sales that climbed nearly 6%, driven by a sophisticated pivot toward digital commerce, high-margin advertising, and a rapidly expanding third-party marketplace. While the Bentonville-based giant exceeded Wall Street’s expectations for both quarterly earnings and revenue, the results arrived alongside a historic milestone: for the first time in history, Amazon has officially overtaken Walmart as the world’s largest company by annual revenue. This transition highlights a new era of retail competition where the lines between digital marketplaces and brick-and-mortar ecosystems have effectively blurred into a single, high-stakes battlefield.
For the fiscal fourth quarter ending January 31, Walmart’s financial performance demonstrated the resilience of its diversified business model. Revenue rose to $180.55 billion, surpassing the $170.66 billion reported in the same period a year ago. On an adjusted basis, the company earned 74 cents per share, comfortably beating the consensus estimates of analysts surveyed by LSEG. However, the company’s net income for the period saw a decline, dropping to $4.24 billion, or 53 cents per share, compared with $5.25 billion, or 65 cents per share, in the prior-year quarter. This dip was largely attributed to one-time items, including fluctuations in investment gains and losses, legal settlements, and costs associated with business reorganization.
Despite the quarterly beat, Walmart’s forward-looking guidance for the current fiscal year struck a cautious note that left some investors wanting more. The company expects net sales to increase between 3.5% and 4.5%, with adjusted earnings per share projected to range from $2.75 to $2.85. This outlook fell short of the $2.96 per share that Wall Street had anticipated. This conservative forecasting reflects the broader uncertainty of the global macroeconomic environment, though Walmart executives remain optimistic about their ability to capture market share through logistical efficiency and price leadership.
A central theme of Walmart’s recent success is its surprising resonance with affluent consumers. In an extensive interview following the earnings release, Chief Financial Officer John David Rainey highlighted that the company’s investments in "speedy delivery" from its vast network of physical stores are paying dividends. Walmart is no longer just a destination for budget-conscious shoppers; it has become a primary choice for households with annual incomes exceeding $100,000. Rainey noted that while market share gains were observed across all income brackets, the growth among upper-income households was particularly pronounced. This was especially evident in the fashion category, which grew by a mid-single-digit percentage in the fourth quarter. Strikingly, nearly the entirety of that growth was attributed to the $100,000-plus income cohort, suggesting that Walmart’s efforts to modernize its apparel offerings and streamline its digital experience are successfully challenging traditional department stores and premium retailers.
However, this "K-shaped" consumer behavior also reveals a sobering reality for the American economy. Rainey acknowledged that while the wealthy are spending more, the company is seeing persistent "pressure on the lowest income cohort." Internal data shows that the spending gap between the highest and lowest earners has "gapped out," mirroring broader economic trends where lower-income families are disproportionately affected by the lingering effects of inflation and the rising cost of living. For Walmart, maintaining its identity as a value leader while catering to a new, wealthier demographic is a delicate balancing act that will define the tenure of its new leadership.
The fourth-quarter report marked the debut of John Furner as the company’s global CEO. Furner, a veteran of more than three decades at Walmart and the former head of its U.S. division, succeeded Doug McMillon on February 1. Investors view Furner’s appointment as a signal of continuity, as he was a key architect of the strategy to integrate Walmart’s physical stores with its digital platform. Under Furner’s leadership, the company is expected to double down on high-margin revenue streams that exist outside the traditional "buy-low, sell-high" retail model. This includes Walmart Connect, the company’s burgeoning advertising business, which saw a staggering 41% increase in sales during the quarter. By leveraging its massive trove of first-party shopper data, Walmart is transforming itself into a media powerhouse, offering brands the ability to target consumers both online and in-aisle.
The e-commerce segment remains the most vital engine of Walmart’s growth. U.S. e-commerce sales surged 27% in the fourth quarter, marking the 15th consecutive quarter of double-digit digital gains. For the first time, e-commerce accounted for 23% of Walmart’s total U.S. sales—a record high. This growth was fueled by a 50% increase in store-fulfilled deliveries, a metric that underscores Walmart’s logistical advantage over pure-play online retailers. By using its 4,700 U.S. stores as localized distribution hubs, Walmart can offer same-day and next-day delivery at a lower cost and higher speed than many of its competitors. The retailer’s third-party marketplace is also gaining significant traction, allowing Walmart to expand its assortment without the inventory risk associated with owned merchandise.
The competitive tension between Walmart and Amazon reached a fever pitch with the revelation of their respective annual revenues. Amazon posted $716.9 billion in sales for its most recent fiscal year, narrowly edging out Walmart’s $713.2 billion. While the two companies are not identical—Amazon generates a significant portion of its profits from Amazon Web Services (AWS) and other cloud-based services—the revenue crossover is a symbolic moment. It represents the official end of Walmart’s decades-long reign as the undisputed king of top-line revenue. Nevertheless, Walmart’s recent move to list its stock on the tech-heavy Nasdaq and its achievement of a $1 trillion market capitalization earlier this month suggest that the market now views Walmart more as a technology and logistics titan than a legacy brick-and-mortar retailer.
On the macroeconomic front, Rainey offered a cautiously optimistic outlook regarding inflation and trade policy. He noted that inflation at Walmart in the U.S. was just above 1% in the fourth quarter, with food prices showing even lower levels of inflation. Regarding the potential for tariff-driven price hikes under President Donald Trump’s administration, Rainey suggested that the industry has largely "absorbed or seen the brunt of the impact" already. "It seems to be a little bit more of a normalized price environment," he remarked. While Walmart’s massive scale allows it to negotiate more favorable terms with suppliers and mitigate the impact of tariffs better than smaller competitors, the retailer’s pricing trends are often viewed as a leading indicator for the broader U.S. economy.
The company’s commitment to shareholder returns remains a cornerstone of its financial strategy. Alongside the earnings report, Walmart announced a new $30 billion share repurchase authorization. This program replaces a $20 billion buyback plan approved in 2022 and underscores the company’s confidence in its long-term cash flow generation. Shares of Walmart have outperformed the broader market significantly over the past year, climbing approximately 22% compared to the S&P 500’s 12% gain. Even with a slight cooling of the stock price following the conservative guidance, the long-term trajectory remains robust.
As John Furner takes the helm, the path forward for Walmart involves a complex orchestration of physical and digital assets. The company’s ability to capture the "convenience" market through store-fulfilled delivery, while simultaneously scaling its advertising and marketplace businesses, has created a diversified ecosystem that is less dependent on thin grocery margins. The "Walmart of the future" appears to be a hybrid entity: a grocery powerhouse, a high-end fashion destination for the wealthy, a digital marketplace for entrepreneurs, and a data-driven advertising agency. While Amazon may have captured the revenue crown for now, Walmart’s strategic evolution and its $1 trillion valuation suggest that the battle for the future of global commerce is only just beginning. The coming fiscal year will test whether Walmart can continue to bridge the gap between its legacy as a discount leader and its future as a tech-enabled retail sovereign, all while navigating an economy that is increasingly divided by income and digital adoption.