The retailer's shares were down 7% in trading before the bell. The stock had risen about 72% last year and hit a fresh record high of $105 last week.
Some analysts noted that Walmart typically issues a conservative forecast early in its fiscal year.
The Bentonville, Arkansas-based retailer forecast annual sales to rise in the range of 3% to 4%, compared with analysts' expectations of 4% growth, according to data compiled by LSEG.
The outlook includes a 20 basis point impact from the negative effect of an additional day in the leap year of 2024, and a boost of 20 basis points from the acquisition of smart-television manufacturer Vizio, the company said in a statement.
As one of the first major U.S. retailers to shed light on the crucial holiday quarter, Walmart's forecast hints at how the retailer expects to fare under President Donald Trump's additional tariffs on goods made in China, and the threat of 25% tariffs on products made in Mexico and Canada.
"This outlook in our view is a bit more conservative than in the past. And I think it's likely because there's a lot of uncertainties this year," CFRA Research analyst Arun Sundaram said.
Sundaram said Walmart's U.S. same-store sales could have been higher if not for the slower January, when U.S. retail sales experienced their largest monthly decline in two years, hampered by frigid temperatures, wildfires, and motor vehicle shortages.
"Clearly the lower income consumer is still feeling headwinds from elevated inflation and high interest rates," he added.
Still, Walmart reported total U.S. comparable sales growth of 4.6% in the fourth quarter, which includes November, December, and January. That surpassed analysts' estimates of a 4.15% increase, according to data compiled by LSEG.
Higher income customers or households making six figures were the top drivers of market share in the latest quarter, Walmart said, with seasonal merchandise, auto and home products being top draws. General merchandise sales rose in the low-single-digits, while grocery sales rose in the mid-single digits, helped in part by higher sales of its in-house brands.
The company also noted higher sales of GLP-1 drugs in the quarter. Overall, transactions, excluding fuel, rose 2.8% at its more than 4,600 U.S. stores with average checks at the till rising 1.8%.
U.S. e-commerce sales rose 20% as shoppers also opted for more store-fulfilled pickup and delivery options, the retailer said, adding that one-third of shoppers elected to have deliveries in three hours or less.
"We have momentum driven by our low prices, a growing assortment, and an eCommerce business driven by faster delivery times," Walmart's CEO Doug McMillon said in a statement.
Walmart on Thursday also forecast adjusted earnings per share for fiscal year 2026 in the range of $2.50 to $2.60, compared with analysts' expectations of $2.76 in profit per share, according to data compiled by LSEG.
For the first quarter it expects consolidated net sales to rise between 3% and 4%, compared to expectations of 3.3% growth.
Fourth quarter adjusted earnings came in at 66 cents per share, topping expectations by 2 cents. Sales rose 4.1% to $180.6 billion.
