Walmart (WMT) Stock: Strong Revenue, But the Outlook Let Investors Down

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Walmart (WMT) Stock: Strong Revenue, But the Outlook Let Investors Down


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TLDR

  • Walmart’s US comparable sales grew 4.1% in Q1, the slowest pace in two years
  • Q2 adjusted EPS guidance of 72–74 cents came in below Wall Street’s 75-cent estimate
  • Total revenue rose 7.3% to $177.75 billion, beating expectations
  • Advertising revenue jumped 37%, e-commerce sales climbed 26%
  • Rival Target reported 5.6% comparable sales growth and raised its full-year profit outlook

Walmart (WMT) stock dropped around 2.6% in premarket trading Thursday after the company reported its slowest comparable sales growth in two years and issued a profit outlook that fell short of Wall Street expectations.

WMT Stock Card
Walmart Inc., WMT

WMT stock was trading down roughly 2.5% early Thursday.

US comparable sales — a key retail metric — rose 4.1% in the quarter ending April 30. That matched analyst estimates but was a step down from the 4.6% growth posted the prior quarter, and the weakest reading since Q1 2024.

Transactions were up 3% and average ticket value rose 1.1%.

The number that stung investors most was the Q2 earnings outlook. Walmart guided for adjusted EPS of 72 to 74 cents, below the FactSet consensus of 75 cents.

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For the full year, the company kept its guidance unchanged at $2.75 to $2.85 adjusted EPS — the same “conservative” range it set back in February.

How Walmart’s Numbers Stack Up

Total revenue for the quarter came in at $177.75 billion, up 7.3% year-over-year and ahead of the $174.89 billion consensus.

Net income rose 18.8% to $5.33 billion. Adjusted EPS of 66 cents matched estimates exactly.

Sam’s Club comparable sales grew 3.9%, beating the 3.3% estimate. Transactions rose 6.2%, though average ticket fell 2.2%.

The standout numbers were in higher-margin businesses. Advertising revenue surged 37%. E-commerce sales jumped 26%. Membership fee revenue grew 17.4%.

Higher fuel costs dented operating income by around 250 basis points in Q1. Walmart said it tried to absorb those costs internally to keep shelf prices low.

US gross profit margin still managed to grow 29 basis points, helped by the membership and advertising gains.

Target Contrast Adds to the Pressure

The timing of the report didn’t help. Just a day earlier, Target posted comparable sales growth of 5.6% — the fastest in four years — and raised its full-year profit outlook to the high end of its guidance range.

That direct comparison put extra pressure on Walmart’s numbers, even where they beat on revenue.

CEO John Furner said the results reflect “continued focus on delivering across the enterprise — better shopping experiences, a broader assortment, and faster delivery.”

The company also pointed out that it saw strong market share gains in the quarter, with higher-income shoppers increasingly choosing Walmart for convenience and delivery services.

WMT stock has still gained 17.5% year-to-date through Wednesday. Target is up 25.2% over the same stretch.

Walmart expects Q2 net sales growth of 4% to 5%, compared to analyst estimates of 5.09%.

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