Walmart Inc (NASDAQ:WMT) stock fell 2.81% (As on February 20, 11:24:24 AM UTC-4, Source: Google Finance) after the company issued a cautious annual outlook that disappointed Wall Street, despite posting solid fourth-quarter results in new chief executive John Furner’s first earnings report. The advertising businesses globally were up 46% this year to $6.4 billion, and membership fees exceeded $4.3 billion. The business continues to generate strong cash flow, with operating cash flow of $42 billion and growth in free cash flow of 18% in FY 2026.

WMT in the fourth quarter of FY25 has reported the adjusted earnings per share of 74 cents, beating the analysts’ estimates for the adjusted earnings per share of 73 cents. The company had reported the adjusted revenue growth of 5.6 percent to $190.7 billion in the fourth quarter of FY25, beating the analysts’ estimates for revenue of $190.4 billion. The operating income grew 10.8%, outpacing sales growth, and global e-commerce jumped 24% to reach a record share of US sales. US comparable sales, excluding fuel, increased 4.6%, reflecting continued consumer demand for value and convenience despite broader economic uncertainty. E-commerce sales were strong across markets, with growth up 24%. The company ended the quarter with inventory up 2.6% or about half the rate of sales growth. Sales were strong across each segment of the business, and this includes sales of general merchandise, which grew on a global basis and was up low single digits for Walmart U.S., led by fashion.

For its 2026 financial year, Walmart forecast net sales growth of 3.5% to 4.5%, with operating income rising 6% to 8%, but analysts had expected a more bullish outlook, sending shares lower. The company said it expects adjusted earnings to rise to between US$2.75 and US$2.85 per share this fiscal year. Analysts on average were expecting profit to jump to US$2.97 per share. The outlook highlights the pressure Walmart is facing to sustain growth under its new chief executive officer, John Furner. Strong results recently catapulted the market capitalisation of the world’s largest retailer past US$1 trillion, but the company is running up against fierce competition, uneven consumer sentiment and a lofty bar from investors. For FY 2027, WMT expect capital expenditure levels to be approximately 3.5% of sales.

Furner, who succeeded longtime chief executive Doug McMillon on 1 February, faces a high bar from investors assessing whether the company’s growth trajectory can sustain its trillion-dollar valuation