Walmart Stock (WMT) Falls as Q2 Guidance Lags Expectations

Walmart (WMT) stock fell 3% in Thursday’s pre-market trading as the big-box retailer’s fiscal second-quarter guidance fell short of the Street’s expectations, with elevated gas prices impacting consumer budgets. The company’s Q1 FY27 revenue surpassed expectations as customers looked for value deals and shopped more online. Meanwhile, the first-quarter earnings were in line with expectations.

Key Insights from WMT’s Q1 Earnings

Walmart’s Q1 FY27 revenue grew 7.3% year-over-year to $177.8 billion, surpassing the Street’s consensus estimate of $174.84. The fiscal first-quarter top line gained from 26% growth in global e-commerce sales, supported by store pickup and delivery, as well as marketplace. Additionally, the company’s advertising revenue surged 37%. U.S. comparable sales increased 4.1%. Walmart’s U.S. division benefited from strength in its grocery sales and higher general merchandise business. Also, spending by higher-income households supported Q1 revenue.

Walmart’s Q1 FY27 adjusted EPS (earnings per share) rose 8.7% year-over-year to $0.66, in line with the Street’s expectations.

Walmart’s Q2 Outlook Fails to Impress

Walmart expects Q2 FY27 net sales growth in the range of 4% to 5% and adjusted EPS of $0.72 to $0.74. Analysts were expecting adjusted EPS of $0.75. Higher fuel prices due to the tensions in the Middle East and macro uncertainty are weighing on consumer spending.

Also, the company kept its full-year outlook intact. It continues to expect FY27 net sales growth of 3.5% to 4.5% and adjusted EPS between $2.75 and $2.85.

Is WMT Stock a Buy, Sell, or Hold?

Currently, Wall Street has a Strong Buy consensus rating on Walmart based on 26 Buys and one Hold. The average WMT stock price target of $141.39 indicates 8% upside potential.

These ratings/price targets are expected to be revised as analysts react to the Q1 print and outlook.