Shares of Walmart Inc. (WMT) fell more than 3% in pre-market trading on Thursday after the retail giant issued a weaker-than-expected profit forecast for the current quarter, overshadowing a revenue beat and solid e-commerce growth. Walmart projected adjusted earnings per share of 72 to 74 cents, below the Wall Street consensus of 75 cents.
For the quarter ended April 30, Walmart reported adjusted EPS of 66 cents, matching analyst estimates and up from 61 cents a year earlier. Total revenue rose 7.3% to $177.75 billion, exceeding expectations of $175 billion. However, U.S. comparable sales—a key retail metric—grew just 4.1%, the slowest pace in two years and a deceleration from 4.6% in the prior quarter. This contrasted with rival Target, which a day earlier reported comparable sales growth of 5.6% and raised its full-year profit outlook, adding pressure on Walmart's stock.
CFO John David Rainey highlighted that rising fuel costs are squeezing consumers unevenly, with low-income shoppers becoming more budget-conscious. The national average gasoline price has climbed to $4.56 per gallon, up sharply from $3.18 a year ago. Higher fuel expenses also increased the value of Walmart's inventory and raised transportation costs, denting operating income by around 250 basis points in the quarter.
On the positive side, advertising revenue surged 37%, global e-commerce sales jumped 26%, and membership fee revenue rose 17.4%. The company maintained its full-year guidance but indicated that full-year sales would likely land near the upper end of its 3.5% to 4.5% growth range.
Net income climbed nearly 19% to $5.33 billion. Analysts remain broadly positive on the stock, but the cautious near-term outlook and moderating comparable sales growth weighed on investor sentiment. WMT stock had gained over 17% year-to-date before the report.
