Walmart turned in a solid quarter on paper — revenue beat, earnings matched, e-commerce is humming. But the stock got punished anyway, and here’s why.
The retailer issued Q2 earnings guidance of 72 to 74 cents per share. Wall Street was sitting at 75 cents. That one-cent miss was enough to send WMT down more than 6% on Thursday, its steepest one-day drop in over a year.
The stock had already run hard — up more than 17% this year heading into the print, outpacing the broader S&P 500. That kind of setup doesn’t leave much room for disappointment.
For the quarter ended April 30, Walmart reported adjusted EPS of 66 cents, in line with estimates and up from 61 cents a year ago. Revenue came in at $177.75 billion, a 7.3% year-over-year increase and ahead of the $175 billion consensus.
Net income rose nearly 19% year-over-year to $5.33 billion.
CFO John David Rainey was candid about what’s happening at the checkout. National average gasoline prices have climbed to $4.56 per gallon, up sharply from $3.18 a year ago. That’s squeezing lower-income shoppers and changing how they spend.
“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 silver lining: those same budget pressures are pushing more consumers toward Walmart. Higher-income shoppers, meanwhile, are gravitating toward Walmart’s delivery services and premium categories like fashion and beauty.
Higher fuel costs also raised Walmart’s own transportation and logistics expenses tied to stocking shelves and fulfilling online orders.
US comparable sales rose 4.1% during the quarter, matching estimates but marking the slowest pace since early 2024.
For context, rival Target posted comparable sales growth of 5.6% the day prior and lifted its full-year outlook.
The digital side of the business continues to carry weight. Global e-commerce sales rose 26% year-over-year, with e-commerce now accounting for nearly a quarter of total global sales.
Advertising revenue surged 37%. Membership fee revenue climbed 17.4%.
At Sam’s Club, comparable sales rose 3.9%, ahead of analyst estimates, with customer transactions up 6.2%.
Walmart said it plans to keep leaning on low prices to capture more market share as the consumer environment shifts.
The company also disclosed it has filed for tariff refunds following a US Supreme Court ruling that deemed certain tariffs illegal. Rainey estimated Walmart had paid roughly $2.4 billion in those tariffs but said the company does not expect a major financial windfall from the filing.
Full-year guidance was maintained, with sales expected to land near the upper end of the 3.5% to 4.5% growth range.
Analyst sentiment across Wall Street remains broadly positive, with the majority of firms still rating WMT a buy.
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