Walmart Q1 Revenue Beats at $177.8B, E-Commerce & Advertising Hit Record Highs, but Fuel Costs Cut Profit Growth in Half
Bitget2026/05/21 14:01-
Total Quarterly Revenue: $177.8B, +7.3% YoY, above consensus estimate of $175.06B.
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Adjusted EPS: $0.66, in line with market expectations.
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Operating Income: $7.493B, +5.0% YoY, notably lagging revenue growth, primarily dragged by fuel costs.
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Fuel Cost Impact: Created a 250 bps headwind on operating margin; the company absorbed virtually all fuel price increases without passing them on to consumers.
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Walmart U.S. Net Sales: $117.2B, +4.5% YoY.
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U.S. Comparable Sales (ex-fuel): +4.1%, slightly above expectations; transaction volume +3.0%, average ticket +1.1%.
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Key Drivers: Improved traffic quality, market share gains, and non-price-driven growth.
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Global E-Commerce: Sales +26% YoY, spanning Walmart U.S., International, and Sam's Club, contributing approximately 530 bps to comparable sales growth; store-fulfilled delivery and third-party marketplace were primary drivers.
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Global Advertising: +37% overall (total advertising revenue +36%; Walmart Connect platform ex-VIZIO +44%), emerging as a high-margin growth engine.
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Membership Fee Income: +17.4% globally; net new member additions reached a record high for the period, with Walmart+ accelerating its expansion.
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International Segment: Net sales $35.1B, +18.0% YoY on a reported basis, +10.1% on a constant currency basis (FX contributed ~$2.3B tailwind); operating income +10.2% in constant currency to $1.425B; e-commerce +27%, advertising +32%.
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Gross Margin: +29 bps, driven by higher mix of high-margin businesses; operating expense ratio +56 bps, reflecting increased depreciation and employee healthcare benefit costs.
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Net Sales Growth (constant currency): +4% to +5%.
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Adjusted Operating Income Growth: +7% to +10%.
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Adjusted EPS Guidance: $0.72–$0.74, below consensus estimate of $0.75.
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Full-Year FY2027 Guidance Maintained: Net sales +3.5% to +4.5%; adjusted operating income +6% to +8%; adjusted EPS $2.75–$2.85.
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Core Tension: Strong revenue and e-commerce/advertising growth, but self-absorbed fuel costs slowed profit growth, and Q2 EPS guidance missed expectations — triggering short-term market disappointment.
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Key Risks: Persistently elevated fuel prices (potential for equal or greater pressure in Q2), rising fulfillment and delivery costs, international FX volatility, and broader macroeconomic uncertainty.
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Investor Reaction: Shares fell ~3% pre-market; focus remains on cost control capability, sustained contribution from high-margin businesses, and the achievability of full-year guidance — though management highlighted healthy inventory levels and continued market share gains.
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