Walmart Earnings - May 2026
Walmart Inc.
Strong print, tariff caution selloff.
Revenue beat, comp acceleration, e-commerce up 26%, advertising up 37% - but the stock fell 7.1% on cautious tariff commentary.
Walmart Inc. (NYSE: WMT) reported first-quarter fiscal 2027 results (quarter ended April 30, 2026) on May 21, 2026, posting revenue of $177.8 billion (up 7.3% YoY, beating the $174.98B consensus) and adjusted EPS of $0.66 (versus consensus of $0.65). Walmart U.S. comparable sales (excluding fuel) grew 4.1%, ahead of the 3.85% consensus and at the high end of management's own guide of 3.5% to 4.5%. Net income of $5.33 billion grew 18.8% YoY on operating leverage from advertising, marketplace and membership.
The print's two stories are the strength of the higher-margin alternative profit businesses (Walmart Connect advertising up 37%, marketplace seller growth continuing to accelerate, Walmart+ membership penetration rising) and the headwind from elevated diesel and gasoline prices, which compressed operating income by approximately 250 basis points in the quarter. Global e-commerce grew 26% YoY, and Sam's Club comp sales (excluding fuel) rose roughly 6.7%. Despite the operational beat, the stock fell approximately 7.1% on May 21 on cautious tariff and consumer commentary.
Walmart continues to execute the transition from a defensive staples retailer to a higher-margin platform that monetizes its scale through advertising, marketplace, financial services and membership. The 4.1% Walmart U.S. comp is the cleanest sign that the share-gain trend remains intact and that higher-income households continue to consolidate trips into Walmart. Tariff pass-through was discussed at length on the call; management's tone was disciplined: absorb modestly, pass-through selectively, and rely on supplier negotiation to limit price increases. With a Strong Buy consensus, a 12-month average price target near $141, and a defensive profile suited to a soft consumer backdrop, we view WMT as a core long-term holding with single-digit annual return expectations.
Headline KPIs at a Glance
Strongest top-line in five quarters, traffic-led growth.
Q1 FY27 revenue of $177.8 billion grew 7.3% YoY (about 6.0% constant currency), the company's strongest top-line growth in five quarters. Walmart U.S. comp sales excluding fuel grew 4.1%, comprised of traffic of approximately +2.8% and a ticket of roughly +1.3%, the rare combination of traffic-led growth that has characterized Walmart's recent share gains.
How the print compared to consensus
Net income of $5.33 billion grew 18.8% YoY, materially faster than revenue, reflecting (a) the mix shift to higher-margin advertising, marketplace and membership revenue, and (b) ongoing automation-driven supply chain leverage. The major P&L headwind was fuel: diesel and gasoline cost inflation reduced operating income growth by approximately 250 basis points in the quarter.
Walmart U.S. accelerates, alt-profit scales.
Walmart U.S. Approximately two-thirds of revenue. Comp sales (ex fuel) of +4.1% beat consensus and represented an acceleration versus Q4. Grocery and general merchandise both grew; share gains continued in apparel, home and consumables. Higher-income households (above $100K annual income) continued to be the fastest-growing customer cohort.
Walmart International. Constant-currency growth led by Walmex, Canada and India (Flipkart and PhonePe). Profitability continues to improve as Walmart rationalizes its international footprint and focuses on higher-return markets. Currency was a modest headwind on reported growth.
Sam's Club. Comp sales (ex fuel) of +6.7%. Member growth continued at a healthy pace and renewal rates remain at all-time highs. Scan and Go technology and the Sam's Club fuel offer continue to drive stickiness.
Alternative Profit. Walmart Connect advertising revenue grew 37% YoY, marketplace seller count continued to accelerate, and Walmart+ membership penetration rose. These higher-margin streams are why operating income growth can continue to outpace revenue growth.
FY27 outlook reaffirmed.
| Metric | FY2027 Guidance (Reaffirmed) | Change vs. Prior |
|---|---|---|
| Net Sales (CC) | +3.5% to +4.5% | Reaffirmed |
| Adjusted Operating Income (CC) | +6.0% to +8.0% | Reaffirmed |
| Adjusted EPS | $2.75 to $2.85 | Reaffirmed |
| Q2 FY27 Net Sales (CC) | +3.0% to +4.0% | Initial guide |
| Q2 FY27 Adj. Operating Income (CC) | +3.5% to +5.5% | Initial guide |
| Dividend | Raised February 2026 | 53rd consecutive annual increase |
Surprises and their stock-price implications
- Revenue beat of approximately $2.8 billion. Top-line growth of 7.3% comfortably exceeded the 5.4% consensus expectation, driven by Walmart U.S. comp acceleration and international strength.
- Walmart Connect advertising up 37%. The advertising platform continues to scale at well above the underlying business rate. Management confirmed Walmart Connect is now the second-largest digital advertising business in U.S. retail.
- Global e-commerce up 26%. Continued strength in both Walmart U.S. e-commerce and Flipkart in India. The unit economics of e-commerce continue to improve, with contribution margin now approaching parity with stores.
- Fuel headwind of 250 basis points to operating income. The largest cost-side surprise. Management noted the headwind should moderate in the second half but the magnitude in Q1 was greater than initially modeled.
- Higher-income household growth. Households above $100K annual income remained the fastest-growing cohort. Walmart's secular share gains continue to broaden across income tiers.
- Tariff commentary measured but cautious. CEO Doug McMillon and CFO John David Rainey discussed tariff exposure and the likelihood of selective price increases on imported general merchandise. The cautious tone was a contributing factor to the May 21 selloff.
- Sam's Club comp at +6.7% (ex fuel). Continued outperformance versus the Walmart U.S. comp reinforces the membership-channel thesis.
Strong Buy holds, ~13% implied upside.
WMT shares closed May 20 at $134.20 (the all-time closing high) ahead of the pre-market release on May 21. Despite beats on revenue and adjusted EPS and double-digit growth in advertising and e-commerce, the stock declined approximately 7.1% intraday on May 21, the largest single-day decline of 2026 for WMT. Investors reacted to the more cautious tariff and consumer commentary, the 250 basis point operating-income headwind from fuel, and the elevated multiple coming into the print. The 52-week range is approximately $96 to $134, and the market capitalization stands near $1.0 trillion after the May 21 selloff.
Analyst recalibration
Wall Street consensus is consistently bullish. According to TipRanks, the consensus rating is Strong Buy based on 26 Buy ratings, 1 Hold, and 0 Sells from 27 covering analysts. S&P Global shows 43 analysts at Strong Buy consensus and the 12-month average price target is approximately $141, with a high of $150 and a low of $120.
Tariffs, fuel, and valuation.
Primary risks
- Tariff and trade policy. Walmart imports a meaningful share of its general merchandise. Higher tariffs would force harder choices between absorption (margin compression) and pass-through (volume risk).
- Fuel cost volatility. Q1's 250 basis point operating income headwind from fuel is illustrative of the sensitivity of Walmart's distribution and fulfillment costs to energy prices.
- Consumer trade-back. If the U.S. consumer balance sheet strengthens, some higher-income households may rotate away from Walmart toward specialty retail, reversing recent share gains.
- Wage cost pressure. Continued minimum wage increases in key states could compress operating margin if comp growth slows.
- Currency. International segment results are exposed to peso, real and rupee movement; FX is a modest headwind in the current environment.
- Valuation. WMT trades at approximately 36x forward adjusted EPS, well above its long-run average. The premium reflects the alternative-profit mix shift but limits room for further multiple expansion.
Catalysts to watch
- Q2 FY27 print (mid-August 2026) and full-year guidance refresh.
- Tariff developments and Walmart's pricing response.
- Walmart Connect advertising revenue disclosure progress.
- International segment profitability inflection, especially India.
- Automation milestones and supply chain margin expansion.
- Membership growth at Walmart+ and Sam's Club renewal rates.
Walmart delivered fundamentally strong Q1 FY27 results, with revenue beat, comp acceleration, advertising up 37%, e-commerce up 26%, and adjusted EPS in line, despite a 250 basis point fuel headwind. The market response, however, was negative: WMT fell approximately 7.1% on May 21, the largest single-day decline of 2026, on more cautious tariff and consumer commentary and a multiple that had reached all-time highs going into the print. With a Strong Buy consensus and 12-month average price target near $141 (roughly 13% upside from the post-print trading level), the selloff creates a more attractive entry point for long-term holders. We continue to view WMT as a core long-term defensive holding with structural higher-margin growth optionality.
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