Key Takeaways
- Walmart shares declined over 6% Thursday, marking the largest single-day selloff since April 2024
- First-quarter EPS of 66 cents aligned with projections; revenue reached $177.75B, surpassing consensus, though Q2 outlook fell short of analyst expectations
- Chief Financial Officer John David Rainey highlighted uneven consumer spending patterns, noting particular strain among lower-income households as gasoline costs reached $4.56 per gallon
- Digital commerce revenue jumped 26% compared to last year; advertising business expanded 37%
- Annual sales projections unchanged, anticipated to approach the high end of the 3.5%–4.5% increase forecast
Walmart delivered respectable first-quarter results that exceeded revenue targets and matched earnings projections, while e-commerce momentum remained strong. Despite this, shareholders sent the stock tumbling, and the reason centers on forward guidance.
The retail giant provided second-quarter earnings projections ranging from 72 to 74 cents per share. Analysts had penciled in 75 cents. That single-cent shortfall triggered a more than 6% decline in WMT shares Thursday, representing the sharpest daily retreat in thirteen months.
Shares had experienced a substantial rally beforehand — climbing over 17% year-to-date prior to earnings, outperforming the S&P 500 index. Such momentum created limited tolerance for any negative surprises.
For the fiscal period concluding April 30, Walmart delivered adjusted earnings per share of 66 cents, matching Street estimates and improving from 61 cents in the prior-year quarter. Total revenue hit $177.75 billion, representing a 7.3% year-over-year expansion and exceeding the $175 billion analyst consensus.
Net profit increased nearly 19% year-over-year to $5.33 billion.
Gasoline Costs Are Altering Consumer Behavior
CFO John David Rainey provided transparent commentary regarding current shopping trends. Nationwide average fuel prices have surged to $4.56 per gallon, climbing substantially from $3.18 twelve months earlier. This increase is creating financial pressure for lower-income customers and influencing purchasing decisions.
“The headline consumer is reasonably healthy, but when you look underneath, the pressure is uneven,” Rainey said. “The low-income shopper you can tell is more budget conscious.”
The positive aspect: economic pressures are directing additional customers to Walmart. Affluent shoppers, conversely, are increasingly utilizing Walmart’s delivery options and purchasing premium merchandise including fashion and beauty products.
Elevated fuel expenses also increased Walmart’s operational costs related to transportation and distribution networks required for inventory management and online order fulfillment.
Domestic comparable store sales advanced 4.1% throughout the quarter, meeting projections but representing the slowest growth rate since early 2024.
By comparison, competitor Target reported comparable sales expansion of 5.6% one day earlier and raised its full-year guidance.
Digital Commerce and Advertising Drive Growth
The company’s online operations continue demonstrating robust performance. Worldwide e-commerce revenue increased 26% versus the previous year, with digital sales now representing approximately one-quarter of total global revenue.
Advertising income soared 37%. Membership subscription fees grew 17.4%.
At Sam’s Club, comparable sales advanced 3.9%, exceeding analyst projections, while customer transaction volume increased 6.2%.
Walmart indicated it will continue emphasizing competitive pricing to gain additional market share amid evolving consumer conditions.
The retailer also revealed it has submitted claims for tariff reimbursements following a Supreme Court decision that declared certain levies unlawful. Rainey estimated Walmart had remitted approximately $2.4 billion under those tariffs but cautioned the company doesn’t anticipate a substantial financial recovery from the filing.
Full-year projections remained unchanged, with revenue expected to reach the upper portion of the 3.5% to 4.5% growth forecast.
Wall Street analyst sentiment continues predominantly favorable, with most firms maintaining buy recommendations on WMT.
