Stock Market Today, May 21: Walmart Shares Slide After Cautious Profit Guidance Highlights Margin Pressure
Walmart (NASDAQ:WMT), a global retail and e-commerce operator, closed Thursday at $121.32, down 7.29%, after cautious profit guidance overshadowed solid quarterly growth. The stock moved lower after results showed revenue and EPS roughly in line with expectations, but highlighted margin pressure from higher fuel costs and strained consumer demand. Investors are watching how guidance and U.S. spending trends evolve. Trading volume reached 52 million shares, about 160% above its three-month average of 20 million shares. Walmart IPO'd in 1972 and has grown 564,585% since going public.
How the markets moved today
The S&P 500 inched up 0.18% to 7,446, while the Nasdaq Composite added 0.09% to finish at 26,293. Within discount stores, industry peers Costco Wholesale closed at $1,050.06 (-2.23%), and Dollar General ended at $105.06 (+0.43%) as investors weighed differing consumer-spending signals.
What this means for investors
Walmart’s Q1 earnings weren’t as bad as the market’s reaction might make them seem. In fact, I think they were very promising, with:
- revenue and same-store sales up 7% and 4%
- e-commerce and advertising sales rising 26% and 37%
- membership fee revenue growing by 17%
- goods purchased through the Sparky AI shopping agent rising fourfold sequentially
- 1 million drone deliveries complete (40% in Q1)
- reasonable (but conservative) guidance for 4% sales growth and a 7% operating income increase in 2026
With Walmart’s EV/EBITDA ratio roughly doubling from 12 in 2024 to 25 today, I’d argue today’s sell-off is more about the company previously being priced for perfection than anything being wrong.
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Josh Kohn-Lindquist has positions in Costco Wholesale. The Motley Fool has positions in and recommends Costco Wholesale and Walmart. The Motley Fool has a disclosure policy.
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