Walmart Inc. (NYSE:WMT) stock is trading lower on Friday. The retail giant issued a cautious forward outlook that eclipsed its strong first-quarter earnings beat reported on Thursday.
Earnings Beat Expectations, But Guidance Disappoints
Adjusted earnings came in at 66 cents per share, matching analyst estimates. Revenue increased 7.3% year over year, or 5.9% in constant currency, to $177.8 billion, ahead of consensus estimates of $175.0 billion.
Walmart forecast second-quarter adjusted earnings between 72 cents and 74 cents per share, trailing analyst expectations of 75 cents. Additionally, its projected quarterly revenue of $182.8 billion to $184.6 billion missed the $186.4 billion Wall Street consensus.
During the call, the Walmart CFO stated that "if the current elevated cost environment persists, the company expects somewhat higher retail price inflation in the second quarter and the second half of the year."
Poised To Achieve FY27 Targets
BTIG analyst Robert Drbul writes that he expects Walmart to be well-positioned to achieve its FY27 sales growth target of 3.5%–4.5%. He projects operating income to grow faster than sales over the next several years.
Growth will be supported by its integrated physical and digital ecosystem, along with expanding high-margin revenue streams such as advertising, membership programs, marketplace operations, and Walmart Fulfillment Services (WFS), all of which are increasingly important to profitability, adds the analyst.
Drbul anticipates WFS to gain meaningful scale and become a larger driver of operating income over time.
The analyst reiterated a Buy rating and maintained a price forecast of $145 and maintained FY27 EPS estimate of $2.85.
For FY28, Drbul boosted the EPS estimate to $3.30, reflecting expectations of continued low- to mid-single-digit revenue growth, further gross margin improvement, and slight SG&A leverage.
WMT Stock Price Activity: Walmart shares were down 0.94% at $120.20 at the time of publication on Friday, according to Benzinga Pro data.
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