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Disappointing guidance from Walmart sparked a wave of losses among top retail stocks as investors worry about a slowdown in consumer spending this year.

Though the big-box giant delivered an earnings beat on Wednesday, its full-year outlook underwhelmed Wall Street expectations in terms of sales growth, operating income, and earnings per share.

For fiscal year 2026, EPS is projected at $2.50-$2.60. Net sales will reach 3% to 4%, while adjusted operating income will climb 3.5% to 5.5% in constant currency. Each forecast fell below consensus estimates.

The figures suggest that consumer strength is set to unravel, an uneasy possibility for those invested in the space.

"With investors on edge on the post-holiday slowdown, WMT's comp shortfall vs. expectations touches a high anxiety point," JPMorgan wrote in a note.

Concern about spending weakness is already on the upswing amid Washington's embrace of protectionist trade policy, with tariffs projected to spur inflation and stretch consumer wallets.

The same uncertainty is unlikely to only impact Walmart, and investors fled other big-box stocks in Thursday's trading session.

Walmart stock fell as low as 7.8%, and shares of other retailers followed:

With more retail earnings to come, UBS equity analyst Michael Lasser told CNBC to expect more guidance caution.

"There's obviously a lot of uncertainty on the horizon. It simply will be prudent to embed some degree of conservatism in the outlook to ensure that these companies are delivering on what they say they're going to do this year."

Analysts, though, maintained a generally bullish view of the stock even as investors sold on Thursday.

"We reaffirm our Buy on WMT as broad-based share gains continue and long-term profitability improves," Bank of America analysts wrote. We believe WMT's investments in supply chain/automation and digital/3P marketplace offerings further support sales and gross margin upside potential."

Read the original article on Business Insider