Walmart falls despite strong earnings

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.