Walmart’s (WMT) stock is down 7% on May 21 after the discount retailer delivered its latest financial results.
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While the sales and profit figures for this year’s first quarter were typically strong, Walmart unnerved investors by offering weak forward guidance and claiming that consumers are beginning to pullback on their spending as inflation persists and gas prices creep higher.
Until now, Walmart had benefitted as consumers sought deals and discounts at the world’s largest retail chain, including on groceries. But now, management says that the American consumer is beginning to rollover as high gas prices and rising inflation strain household budgets.
Walmart’s sales by category. Source: The Fly
Walmart’s Soft Guidance
WMT stock is sliding lower after management issued soft guidance. Specifically, the Arkansas-based company reiterated its previous outlook, which had disappointed analysts and investors when it was delivered last quarter.
Walmart continues to expect earnings per share of $2.75 to $2.85 this year. That remains below Wall Street expectations of $2.91. The company added that it continues to anticipate that its 2026 sales will rise between 3.5% and 4.5% this year.
Management added that consumers are likely to continue reigning in their spending as the effects of tax returns go away and should gas prices continue rising due to the Iran war.
Is WMT Stock a Buy?
The stock of Walmart has a consensus Strong Buy rating among 27 Wall Street analysts. That rating is based on 26 Buy and one Hold recommendations issued in the last three months. The average WMT price target of $141.39 implies 5% upside from current levels. These ratings could change after the company’s financial results.
