Walmart Stock Falls Despite Revenue Beat as Weak Guidance Weighs on Sentiment
Shares of Walmart Inc. (NASDAQ: WMT) dropped more than 7% in early trading on Thursday after the retail giant delivered stronger-than-expected first-quarter revenue but issued earnings guidance that disappointed investors.
The market reaction highlights growing concern over future profitability despite continued strength in sales growth and e-commerce performance.
Walmart Revenue Beats Expectations as Sales Grow Over 7%
Walmart reported first-quarter revenue of $177.8 billion, exceeding analyst estimates of $174.83 billion and marking a 7.3% increase compared to the same period last year.
Adjusted earnings per share (EPS) came in at $0.66, matching Wall Street expectations.
The results suggest Walmart continues to attract consumers despite ongoing economic uncertainty and inflation pressures.
Walmart E-Commerce and Advertising Businesses Deliver Strong Growth
The company posted strong momentum across digital and advertising segments.
Key highlights included:
- Global e-commerce sales increased 26%
- Global advertising revenue climbed 37%
- Walmart U.S. advertising business expanded 36%
- Membership fee revenue rose 17.4% globally
However, operating income growth of 5% was negatively affected by approximately 250 basis points, mainly due to higher fuel expenses across distribution and fulfillment operations.
Walmart Guidance Misses Expectations and Triggers Investor Concern
Despite beating revenue forecasts, Walmart’s forward outlook weighed on sentiment.
For the second quarter, the company expects adjusted EPS between $0.72 and $0.74, with the midpoint of $0.73 falling below analyst expectations of $0.75.
Walmart also maintained its fiscal 2027 adjusted EPS guidance of $2.75 to $2.85, while analysts had projected approximately $2.92.
The weaker outlook raised concerns that rising costs may continue pressuring earnings growth.
Walmart U.S. and Sam’s Club Continue Reporting Comparable Sales Growth
Walmart’s core U.S. business remained resilient.
Walmart U.S. comparable sales increased 4.1%, supported by a 3.0% rise in transactions.
The segment also benefited from strong growth in:
- Store-fulfilled delivery services
- Advertising operations
- Third-party marketplace activity
- E-commerce expansion
Meanwhile:
- Sam’s Club U.S. comparable sales grew 3.9%
- Walmart International net sales rose 10.1% in constant currency
The figures indicate continued consumer demand across multiple regions and business segments.
Walmart Expects Continued Revenue Growth in the Next Quarter
For the upcoming quarter, Walmart forecasts net sales growth of 4% to 5% in constant currency, signaling confidence in continued top-line expansion.
John Furner, President and CEO of Walmart, stated that company performance reflects ongoing efforts to improve shopping experiences, expand product selection, and enhance delivery speed.
Analysts Say Strong Revenue Was Overshadowed by Earnings Pressure
Analysts at Vital Knowledge described the overall report as modestly negative, citing higher costs related to fuel, healthcare, and depreciation as factors weighing on profitability.
The analysts also noted that weaker second-quarter guidance contributed to investor disappointment.
However, they emphasized that Walmart’s revenue growth remains impressive and suggests the company continues benefiting from market share gains, operational execution, and resilient consumer spending.
