l really good about our ability to navigate that. We feel really good about our relevance with customers. And we feel really good about how our business model is changing to inflect our profits upwards.” It doesn’t get much chirpier than that, and the track record backs it up. Counterintuitively, the company’s share price immediately did a face plant; however, it was not the results but the conservative forward guidance that put investors in a bad mood with the shares.  Walmart last week forecast annual sales growth of between 3 and 4 per cent in FY26, below analyst expectations of 4 per cent. Capping off the year with a fine quarter In the quarter ending the fiscal year to January 31, Walmart pulled in consolidated revenue of US$180.6 billion, an increase of 4.1 per cent, year over year (5.3 per cent adjusted for currency fluctuation). Gross margin improved at the same time, rising more than 50 basis points, to 23.9 per cent. The top line benefited from currency fluctuations. Global e-commerce increased by 16 per cent, to over US$30 billion. Comparable-store sales for Walmart US were up 4.6 per cent. Net income for the quarter was US$5.3 billion, down in the mid-single digits from last year, due to factors unrelated to operations. For the full year, company revenue was US$681.0 billion, an increase of 5.1 per cent (5.6 per cent, currency-adjusted) over 2023. Net income was US$19.4 billion, more than 25 per cent on the base year. International: China, Mexico and Canada shine Walmart expects India, Central America – including Mexico – and China to do much of the heavy lifting in the company’s international growth in the short-to-medium term. In the fourth quarter, India took a back seat because Flipkart’s ‘The Big Billion Days’ event had shifted mostly into the previous quarter. E-commerce growth in the international division slowed accordingly, to 4.4 per cent.  Still, CEO McMillon was buoyant about the results outside the US: “We saw positive traffic and unit growth across markets, with sales strength in general merchandise during festive events.” In the fourth quarter, Walmart International achieved net sales of US$32.2 billion, down slightly (-0.7 per cent) from the fourth quarter last year, but this was primarily due to currency fluctuation. Adjusting for that, the company made a 5.7 per cent gain, with some support from the opening of new stores. Full-year sales were US$121.9 billion (+6.3 per cent on 2023). Constant currency sales were up 9.1 per cent. In China, year-on-year sales galloped ahead by 27.7 per cent on a constant currency basis in the fourth quarter, to US$4.0 billion. Although the company opened six new Sam’s Clubs over the year and four of them in the fourth quarter, its strong result was not only because of openings: comparable-store sales grew by 23.1 per cent. These numbers include Sam’s Club and e-commerce, which are the twin engines of growth in China. E-commerce penetration is around 50 per cent there. China is not only delivering good sales but also membership income at Sam’s Clubs, which grew by 35 per cent in the fourth quarter over last year.  And that’s not all, there is a qualitative benefit, too: China is delivering lessons for how to serve other markets as well. McMillon said: “We’re taking [lessons] from markets like China and quickly standing up fast delivery solutions in other markets.” Retail sales in China, if the official government numbers are to be taken at face value, have held well, but Walmart has outpaced the national average on a constant currency basis.  The National Bureau of Statistics found that national retail sales rose by 3-4 per cent in both November and December. China, in particular, is a geography of focus for Walmart’s international growth prospects. Currently, the international segment accounts for nearly 18 per cent of Walmart’s global revenue and China accounts for about 12 per cent of it. Walmart led retailer pushback on DEI The fourth quarter was important for Walmart in another respect that didn’t get a mention in any of the company’s financial reports and didn’t get a mention on the earnings call with investors either. This was the company’s pivot on DEI initiatives. In November, Walmart said it would not renew a five-year investment in a racial equity centre that was first established in 2020 following the police murder of George Floyd. Walmart also announced that it would no longer participate in the Corporate Equality Index, a ratings tool for DEI practices put out by the Human Rights Campaign. The company even went a step further, with closer oversight of its marketplace to block the sale of products targeting LGBTQ+ minors. And it won’t use race and gender as criteria for supplier contracts anymore either. The Future Hunters Weiner Edrich Brown, a futurist consulting firm in New York City that catchily dubs itself the ‘Future Hunters’, holds workshops for its corporate and non-profit clients that want to try to get their heads around the trends that might be coming up next. Behind it all, there was a principle that Edie Weiner, the company’s CEO, liked to impress on her clients at the workshops I attended there once a month as an executive in the shopping-centre industry. It was a very simple but compelling piece of wisdom that has proven itself time and again: Every trend contains the seeds of its own countertrend.  It’s happening again now across the entire business community with ESG/DEI, beginning in the US with the new administration but already causing shockwaves across the industry. On the surface at least, retailers are divided, with some, like Costco, sticking to their guns, and others, like Walmart and Target, which seemed to have been waiting for the right moment to jettison the whole thing. Walmart’s first moves against DEI are unlikely to be mirrored in its ESG policies though: With its immense network of warehouses, stores and distribution vehicles, cutting back waste and emissions is a profit centre. Further reading: Why Walmart is the latest major retailer to roll back its DEI initiatives