What Happened?
Shares of retail behemoth Walmart (NASDAQ: WMT) fell 6.8% in the afternoon session after the company reported a weaker-than-expected earnings outlook, which overshadowed its solid first-quarter results.
Despite revenue in the first quarter of $175.7 billion beating expectations and adjusted earnings per share meeting them, investors focused on the disappointing forecast for the upcoming quarter and the full year. The company's revenue guidance for the second quarter came in at $185.4 billion at the midpoint, below analysts' estimates of $186.4 billion.
Furthermore, the company's full-year earnings guidance also missed Wall Street's expectations. The market's negative reaction underscores that the cautious forward-looking statements proved more significant to investors than the stable performance in the reported quarter.
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What Is The Market Telling Us
Walmart’s shares are not very volatile and have only had 1 move greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 6 months ago when the stock gained 6.3% on the news that the company reported better-than-expected third-quarter results and raised its full-year financial outlook.
The retail giant posted strong sales and profits that surpassed Wall Street's forecasts, signaling confidence heading into the holiday season. Total revenue climbed 5.8% to $179.5 billion, while its adjusted earnings per share of $0.62 also beat estimates. Another positive was the company's same-store sales, which rose 4.5% year-on-year, demonstrating healthy performance at its existing locations.
The results showed Walmart successfully catered to budget-conscious consumers looking for value. In light of the strong quarter, Walmart increased its full-year profit projections. This stands in sharp contrast to peer Target, which lowered its guidance just a day prior, citing uneven consumer spending and a shift toward value-seeking behaviors that could possibly be benefitting Walmart.
Walmart is up 7.9% since the beginning of the year, but at $121.71 per share, it is still trading 9.3% below its 52-week high of $134.20 from May 2026. Investors who bought $1,000 worth of Walmart’s shares 5 years ago would now be looking at an investment worth $2,576.
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