Walmart shares are down more than 7% today, even though the earnings release looked solid at first glance. Walmart is not an ordinary retailer. The company’s market capitalization remains close to the one‑trillion‑dollar mark.
The scale of its business means Walmart’s results are treated as one of the most important barometers of the health of the U.S. consumer, especially in the essential‑goods segment.
Key metrics
- The company reported $177.8bn in revenue for Q1, above the consensus of $174.83bn.
- Adjusted EPS came in at $0.66, in line with market expectations.
- Global e‑commerce sales rose 26%, and the advertising business grew 37%.
The market reacted negatively mainly to the guidance.
- Walmart expects Q2 adjusted EPS of $0.72–$0.74, while consensus was $0.75.
- The company also maintained its full‑year EPS guidance at $2.75–$2.85, the midpoint of which is below analysts’ expectations of $2.92.
The message from the report is therefore mixed.
- On the one hand, the consumer is still buying: Walmart LFL sales rose 4.1%, and the number of transactions increased 3.0%.
- On the other hand, the company itself shows that cost pressure remains real. Operating profit growth was reduced by 250 basis points due to higher fuel costs in distribution and order fulfillment.
This means that even the world’s largest retailer, benefiting from massive scale and from customers shifting toward cheaper shopping, is not immune to cost inflation.
In the earnings call, Walmart continues to point to a resilient consumer, but it is no longer showing resilience in profits; and the further out these forecasts extend, the less certain the profitability outlook becomes.
WMT.US (D1)
The post‑earnings drop has erased nearly all of this year’s gains (about 15%), pulling the stock back toward the local March low. The decline stopped at the 78.6% Fibonacci level, where the upper boundary of the previous rising channel also runs—suggesting this may be a strong resistance zone. Given the still strongly bullish EMA momentum, the base case could be a transition into consolidation between $120–$130. Source: xStaton5.
Daily summary: Peace agreement draft lifts the market
Oil keeps rising: is there reason to worry?
The US Government Supports the Quantum Revolution
US OPEN: News from the tech sector and Iran are driving the market
The content of this report has been created by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, (KRS number 0000217580) and supervised by Polish Supervision Authority ( No. DDM-M-4021-57-1/2005). This material is a marketing communication within the meaning of Art. 24 (3) of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (MiFID II). Marketing communication is not an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC and Commission Delegated Regulation (EU) 2016/958 of 9 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the technical arrangements for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest or any other advice, including in the area of investment advisory, within the meaning of the Trading in Financial Instruments Act of 29 July 2005 (i.e. Journal of Laws 2019, item 875, as amended). The marketing communication is prepared with the highest diligence, objectivity, presents the facts known to the author on the date of preparation and is devoid of any evaluation elements. The marketing communication is prepared without considering the client’s needs, his individual financial situation and does not present any investment strategy in any way. The marketing communication does not constitute an offer of sale, offering, subscription, invitation to purchase, advertisement or promotion of any financial instruments. XTB S.A. is not liable for any client’s actions or omissions, in particular for the acquisition or disposal of financial instruments, undertaken on the basis of the information contained in this marketing communication. In the event that the marketing communication contains any information about any results regarding the financial instruments indicated therein, these do not constitute any guarantee or forecast regarding the future results.
