Walmart delivered a modest earnings beat in its first quarterly report under CEO John Furner, but investors are focusing less on the holiday strength and more on the retailer’s cautious outlook. As the company’s market capitalization surpasses $1 trillion for the first time, Walmart’s results offer a critical pulse check on the U.S. consumer at a time of macro uncertainty and shifting spending patterns.

Holiday Strength Masks Underlying Caution

For the fourth quarter of fiscal 2026, Walmart reported adjusted earnings per share of $0.74, slightly ahead of the $0.73 consensus estimate. Revenue rose 5.6% year-over-year to $190.7 billion, broadly in line with expectations. For the full fiscal year, revenue reached $715.9 billion, edging above estimates, while adjusted EPS came in at $2.64, modestly ahead of projections.

U.S. same-store sales increased 4.6%, topping forecasts of 4.3%. Growth was fueled by a 2.6% rise in transactions and higher average ticket sizes. Notably, Walmart continues to gain share among higher-income households earning above $100,000 annually — a structural shift that has supported margins in recent quarters.

E-commerce remains a powerful growth engine. U.S. online sales surged 27%, outpacing expectations of 19.8%, driven by store-fulfilled pickup, delivery expansion, marketplace growth, and advertising revenues. Expedited store-fulfilled delivery channels rose more than 50% in the quarter, underscoring Walmart’s strategic push into omnichannel dominance.

Guidance Reflects Macro Sensitivity

Despite solid trailing performance, management’s forward outlook struck a more conservative tone. For the first quarter, Walmart expects revenue growth of 3.5%-4.5% and adjusted EPS of $0.63-$0.65, below Wall Street’s $0.69 estimate. Fiscal 2027 guidance also calls for 3.5%-4.5% revenue growth and adjusted EPS between $2.75 and $2.85, under consensus expectations.

CFO John David Rainey described the broader backdrop as “somewhat unstable,” citing factors such as hiring slowdowns, consumer sentiment softness, and potential debt pressures including student loan repayments. While he emphasized that consumer behavior has not materially deteriorated, the cautious stance suggests management is bracing for potential volatility rather than extrapolating recent strength.

For Israeli and U.S. investors alike, Walmart’s conservative guidance may reflect prudent risk management in an environment where inflation, credit conditions, and election-year uncertainty could reshape consumer spending patterns quickly.

Income Divergence and Strategic Positioning

A key theme emerging from the results is income divergence. Higher-income households continue migrating toward Walmart for value and convenience, boosting grocery and general merchandise sales. Meanwhile, lower-income consumers remain under financial strain, often managing spending paycheck to paycheck.

Sam’s Club sales rose 4%, slightly below expectations, with transaction counts rising but average spend per visit declining — a subtle sign of cautious purchasing behavior.

Looking ahead, Walmart’s ability to maintain share gains while navigating a bifurcated consumer landscape will be central to its performance. Investors will monitor margin resilience, AI-driven efficiencies, and the durability of e-commerce momentum. If macro conditions stabilize, Walmart may once again revise guidance upward as it has in prior years — but for now, management appears intent on setting expectations conservatively in a market that increasingly rewards predictability.