Walmart Beat Earnings But Just Quietly Lost Its Retail Crown

Walmart dropped a solid earnings report this morning — 74 cents adjusted EPS versus the 73 cents Wall Street expected, on $190.66 billion in revenue. Holiday-quarter sales rose nearly 6%. E-commerce surged 27% year-over-year, now accounting for a record 23% of all U.S. sales. By almost every operational measure, the machine is humming.

But here is the part nobody is celebrating: Amazon just passed Walmart as the largest retailer on Earth by annual revenue. Amazon posted $716.9 billion last fiscal year versus Walmart’s $713.2 billion. Yes, Amazon’s number includes cloud computing and other tech services, so it is not an apples-to-apples comparison. But the symbolism matters. The company that spent decades as the undisputed king of retail just got dethroned — quietly, during an otherwise strong quarter.

The other story buried in this report? The K-shaped economy is alive and well inside Walmart’s own stores. CFO John David Rainey told CNBC that spending among the highest earners has “gapped out” relative to lower-income shoppers. Almost all of the growth in fashion — a mid-single-digit grower last quarter — came from households earning over $100,000 a year. Meanwhile, the lowest income cohort is showing “some pressure.” Walmart is winning the affluent customer, but it is a reminder that two very different economies are running simultaneously in this country.

Then there is the guidance. Full-year earnings per share of $2.75 to $2.85 came in well below the $2.96 analysts had modeled. That is the number that had shares wavering in premarket despite the headline beat. The company also raised tariff concerns — though Rainey noted the retail industry has “largely absorbed the brunt” of the impact and expects pricing to normalize.

On the bright side, new CEO John Furner inherits a business with serious momentum: $1 trillion market cap, a fresh $30 billion share buyback authorization, a surging ad business (Walmart Connect grew 41%), and a marketplace that continues to pull in new sellers. The stock is up 14% year-to-date and 22% over the past year, crushing the S&P 500. The question now is whether the best days of this rally are behind it — or whether Walmart’s evolution into an ad-and-marketplace platform can keep the engine running against a suddenly larger rival.