Why Walmart Stock Fell Today
Key Points
Higher tax refunds enabled Walmart's customers to spend more in the first quarter.
But lower-income shoppers may be forced to cut back in the months ahead.
- 10 stocks we like better than Walmart ›
Shares of Walmart (NASDAQ: WMT) sank on Thursday after management's outlook concerned investors.
Image source: Getty Images.
Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an "Indispensable Monopoly" providing the critical technology Nvidia and Intel both need. Continue »
Solid Q1 sales and profits
Walmart's revenue grew 7.3% year over year to $177.8 billion in its fiscal 2027 first quarter, which ended on April 30.
The discount retail giant's U.S. comparable sales, which measure revenue at stores and websites open for at least 12 months, rose 4.1%.
E-commerce sales growth was particularly strong at 26%, driven by store-fulfilled pickup and delivery services. Walmart's high-margin advertising sales jumped 37%.
Higher fuel costs weighed on Walmart's profit margins, but operating income still rose 5% to $7.5 billion.
All told, Walmart's adjusted earnings per share increased 8.2% to $0.66, in line with Wall Street's estimates.
Consumers may be forced to pull back on spending
Investors, however, appeared to focus on management's concerning comments during the company's earnings call.
Walmart maintained its full-year forecast, including net sales growth of 4% to 5% and operating income growth of 7% to 10%.
Yet CEO John Rainey noted that higher tax refunds likely boosted sales in the first quarter. As that temporary boost dissipates, Rainey warned that higher gasoline prices could pressure consumer spending in the quarters ahead.
Still, despite these challenges, Walmart's well-earned reputation for low prices should help it maintain and even increase its market share in this difficult economic environment.
Should you buy stock in Walmart right now?
Before you buy stock in Walmart, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Walmart wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $475,063!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,369,991!*
Now, it’s worth noting Stock Advisor’s total average return is 994% — a market-crushing outperformance compared to 207% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
See the 10 stocks »
*Stock Advisor returns as of May 21, 2026.
Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Walmart. The Motley Fool has a disclosure policy.
Recommended Articles
