2026-02-19 17:01:00
The retail giant’s Q4 results offer a window into consumer spending—and some surprising insights about who’s shopping where
If you want to know how the American consumer is really doing, forget the economic reports for a moment. Just watch Walmart.
On Thursday morning, the world’s largest retailer reported its fourth-quarter earnings, and the numbers tell a fascinating story about the state of the economy—one that matters whether you’re trading currencies, stocks, or just trying to understand market sentiment.
The Headlines: Walmart Crushes Expectations
Walmart reported adjusted earnings per share of 74 cents, beating Wall Street’s expectations of 73 cents, with revenue hitting $190.66 billion versus the $190.43 billion forecast. Not exactly a landslide beat, but consistent outperformance in an uncertain economic environment.
But here’s where it gets interesting for traders: The company’s forward guidance disappointed investors. For the full fiscal year 2027, Walmart expects earnings per share between $2.75 and $2.85, falling short of Wall Street’s $2.96 expectation. Translation? Even America’s retail juggernaut is playing it safe with predictions.
The stock? Up about 2% on the news—a classic “buy the results, shrug at the caution” reaction.
The Economic Signal: A “K-Shaped” Recovery in Action
Here’s where Walmart’s earnings become more than just a retail story. They’re a real-time snapshot of what economists call the “K-shaped recovery”—where different income groups are experiencing dramatically different economic realities.
Walmart’s CFO John David Rainey acknowledged seeing “some pressure on the lowest income cohort,” noting that spending among the highest earners compared to lower-income groups “had gapped out a little bit”.
In plain English: Wealthy shoppers are doing fine. Everyone else? Not so much.
The numbers back this up. About 75% of Walmart’s market share gains came from households earning over $100,000 annually. That’s right—the discount retailer is becoming a haven for the affluent looking for value.
For forex and equity traders, this matters. It suggests consumer spending remains resilient at the top, which supports economic growth, but the foundation might be shakier than headline numbers suggest.
Promoted: Those economic signals you just read about? They’re no longer just “risk factors”—they’re tradable contracts.
Coinbase just opened their doors to regulated prediction markets, allowing you to take direct positions on real-world outcomes like inflation data or economic shifts. Stop letting the news happen to you and start trading the event itself.
Explore Prediction Markets on Coinbase! (Initially limited to a subset of U.S. users)
Disclosure: We may earn a commission from our partners if you sign up through our links, at no extra cost to you.
The Inflation Picture: Finally Cooling
Remember when inflation was the only story that mattered? Well, Walmart’s data shows the heat is finally coming off.
Food inflation at Walmart came in just above 1% in the fourth quarter, while the company’s internal grocery inflation has dropped to roughly 1.3%, even lower than the national CPI which cooled to 2.4% in January 2026. Rainey called it a “normalized price environment” and suggested the retail industry has largely absorbed the impact of tariffs.
That’s potentially significant for central bank policy and currency markets. If inflation continues moderating, it gives the Federal Reserve more flexibility—though traders should note that Walmart has unique pricing power that smaller retailers don’t enjoy.
The E-Commerce Explosion Continues
While everyone debates whether physical retail is dead, Walmart is quietly winning the digital game. U.S. e-commerce sales surged 27% compared to the prior year, marking the 15th consecutive quarter of double-digit digital gains. Even more impressive: E-commerce now represents 23% of Walmart’s U.S. sales—a record high.
This shift isn’t just about convenience. It’s changing Walmart’s entire business model. The company’s advertising arm, Walmart Connect, grew roughly 41% in the quarter, turning store aisles and online real estate into high-margin ad space. Think of it as Walmart slowly transforming into an advertising platform that happens to sell groceries.
Technical Analysis: What’s the Chart Saying?
Walmart (WMT) 1-Hour: Chart Faster with TradingView
Looking at the stock chart (WMT currently trading around $128.72, up 13.87% year-to-date), we’re seeing some interesting price action that matters for traders considering a position.
The technical picture shows Walmart price in an uptrend but in a correction phase after reaching highs near $134.76. Here’s what stands out:
Support Zones to Watch:
- The 38% Fibonacci area also displayed previous support in early February, so that may continue to hold with this round of net positive earnings.
- With a daily Average True Range (ATR) of 3.30, if support forms, it could be in a range roughly between $125.00 – $128.00.
- Primary support potential appears between $120.00 and $123.50—this zone combines three key factors: a rising 200 moving average (the blue line on the chart), the 61.8% Fibonacci retracement level from the recent rally, and a broken resistance area that may attract technical buyers.
What Traders Should Monitor:
- If WMT holds the recent $125-$128 zone, it sets up a potential higher low and continuation pattern
- A break below $125 with volume could signal more downside toward the strong technical confluence area around $120.00 – $123.50
- $135.00 area remains the key resistance area to reclaim for bulls
The market seems to be digesting whether Walmart’s cautious guidance outweighs its consistent execution. Classic tug-of-war between short-term uncertainty and long-term strength.
Promotion: You’ve got the technical levels down, but is your execution clinical or emotional? TradeZella is the #1 AI-powered journal that replays your trades tick-by-tick to identify exactly where you hesitated or over-leveraged. Click on the link and use code “PIPS20” to save 20%!
Disclosure: To help support our free daily content, we may earn a commission from our partners if you sign up through our links, at no extra cost to you.
The Competitive Landscape: Walmart vs. Amazon
In a notable shift, Amazon officially topped Walmart as the largest retailer by annual revenue, posting $716.9 billion compared to Walmart’s $713.2 billion. But don’t call it a defeat just yet—Amazon’s revenue includes cloud computing services, making it not quite an apples-to-apples comparison.
What matters more: Both companies are following similar playbooks, building high-margin businesses (advertising, marketplaces, memberships) around their core retail operations. For traders, this suggests the retail sector winners won’t be determined by who sells the most stuff, but who builds the most profitable ecosystem around shopping.
The Outlook: Cautiously Optimistic (Emphasis on Cautious)
Walmart’s guidance for fiscal 2027 projects sales growth of 3.5% to 4.5% and operating income growth of 6% to 8%. Not explosive, but steady—which is exactly what you’d expect from a company that’s seen every economic cycle and lived to tell the tale.
The big wildcard? Tariffs and tax refunds. Management is factoring in potential headwinds from trade policy, but there’s also an interesting tailwind coming. Due to tax changes, American consumers are expected to receive significantly larger refunds in March and April—potentially triggering increased spending in discretionary categories where Walmart has been seeing softer demand.
What This Means for Traders
For Forex Traders: Walmart’s results support the narrative of a resilient but bifurcated U.S. economy. Strong high-end consumer spending suggests USD strength from economic growth, but weakness at lower income levels could eventually pressure consumer-driven GDP. Watch for this dynamic in consumer sentiment data and retail sales figures.
For Stock Traders: The technical setup offers potential entries for longer-term investors and traders if support holds, but the cautious guidance means you’re buying into uncertainty about growth acceleration. The stock’s premium valuation (trading around 45x forward earnings according to recent reports) means there’s limited margin for error.
For Economic Watchers: Walmart has essentially become a real-time economic indicator. Its weekly foot traffic of 280 million customers makes it arguably the best single barometer of consumer health. When Walmart’s CFO expresses caution, markets should listen.
The Bottom Line
Walmart’s Q4 earnings paint a picture of an economy that’s functioning but fragmenting. The company is winning by being everything to everyone—value destination for budget-conscious shoppers, convenient option for wealthy customers, and increasingly, a digital advertising platform.
As Rainey noted, food inflation is easing and the environment is normalizing, which is genuinely good news. But the persistent weakness among lower-income consumers and cautious forward guidance suggest this economic expansion has some cracks in the foundation.
For traders, the key takeaway is simple: Watch what Walmart does, not just what it says. The company’s ability to gain market share across income levels, grow e-commerce profitably, and navigate inflation gives it competitive advantages most retailers can only dream about. But even giants can stumble when the economic tide shifts.
Keep Walmart on your watchlist—not just as a potential trade, but as a window into the real economy that moves markets.
Disclaimer: This article is for educational purposes only and does not constitute investment or trading advice. All trading decisions and risk management are the sole responsibility of the individual trader due to individual situations, risk preferences, portfolio makeup, execution abilities, etc. Please trade responsibly.
Promoted: Protecting your trading capital starts with securing your access. Don’t let a weak password be the single point of failure for your brokerage or exchange accounts. LastPass simplifies your digital life by generating and storing complex, encrypted passwords for every site you use. Secure Your Accounts with LastPass Today!
Disclosure: We may earn a commission from our partners if you sign up through our links, at no extra cost to you.
