Walmart (WMT) Stock Plunges Over 6% Despite Revenue Beat on Weak Guidance

Key Takeaways

• Walmart shares tumbled over 6% Thursday, marking the steepest decline in 13 months
• First quarter earnings per share of 66 cents matched projections; $177.75B in revenue exceeded forecasts, but second quarter outlook disappointed investors
• Chief Financial Officer John David Rainey highlighted mounting consumer challenges, particularly among lower-income households as gasoline reaches $4.56 per gallon
• Digital commerce revenue jumped 26% annually; advertising income soared 37%
• Annual sales projections unchanged, anticipated to reach the higher end of 3.5%–4.5% expansion target

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Walmart delivered respectable quarterly results — surpassing revenue targets, matching earnings expectations, and posting strong digital growth. Yet investors sent shares tumbling. Here’s what triggered the selloff.

Walmart Inc., WMT

The retail giant projected second quarter earnings between 72 and 74 cents per share. Analysts had anticipated 75 cents. That single-cent shortfall triggered a more than 6% decline in WMT shares Thursday, representing the sharpest single-session loss in over 13 months.

Shares had already climbed significantly — gaining more than 17% year-to-date before the earnings announcement, outperforming the S&P 500 index. Such momentum leaves little cushion for any negative surprises.

For the fiscal period concluding April 30, Walmart delivered adjusted earnings of 66 cents per share, matching analyst projections and improving from 61 cents in the comparable prior-year period. Sales totaled $177.75 billion, reflecting 7.3% year-over-year expansion and surpassing the $175 billion Street estimate.

Net profit increased nearly 19% year-over-year to $5.33 billion.

Rising Gas Costs Transform Shopping Behavior

Chief Financial Officer John David Rainey offered frank commentary on evolving consumer trends. National gasoline prices have surged to $4.56 per gallon, climbing sharply from $3.18 twelve months earlier. This spike is creating financial strain for lower-income customers and altering purchasing patterns.

The upside: these financial constraints are driving additional traffic toward Walmart. Affluent consumers, conversely, are increasingly utilizing Walmart’s delivery options and purchasing higher-margin items including fashion and beauty products.

Elevated fuel expenses have also increased Walmart’s own operational costs related to inventory replenishment and online order fulfillment.

Domestic comparable store sales advanced 4.1% throughout the quarter, aligning with projections but representing the most modest growth rate since early 2024.

For perspective, competitor Target reported comparable sales expansion of 5.6% one day earlier and raised its annual guidance.

Digital Platforms and Advertising Deliver Strong Performance

The company’s online operations continue showing robust momentum. Worldwide e-commerce sales expanded 26% year-over-year, with digital channels now representing approximately one-quarter of total global revenue.

Advertising income skyrocketed 37%. Membership subscription revenue increased 17.4%.

At Sam’s Club, comparable sales grew 3.9%, exceeding analyst forecasts, with customer visit counts rising 6.2%.

Walmart indicated it will continue emphasizing competitive pricing to gain additional market share amid shifting consumer dynamics.

The retailer also revealed it has submitted applications for tariff reimbursements following a Supreme Court decision that invalidated certain import duties. Rainey estimated Walmart had remitted approximately $2.4 billion under those tariffs but noted the company doesn’t anticipate a substantial financial benefit from the filing.

Full-year projections remained unchanged, with revenue expected to approach the upper boundary of the 3.5% to 4.5% growth forecast.

Wall Street analyst consensus continues trending positive, with most firms maintaining buy recommendations on WMT shares.

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