Walmart Q1 Earnings Top Estimates as Marketplace, Ads Gain Steam

Walmart Inc. WMT reported first-quarter fiscal 2027 results, wherein both top and bottom lines surpassed the Zacks Consensus Estimate. Results benefited from strong e-commerce momentum, advertising growth, membership income gains and broad-based strength across segments.Continued investments in automation, delivery capabilities and higher-margin commerce solutions also aided performance. Management issued second-quarter guidance and reiterated its fiscal 2027 outlook.Walmart’s Quarterly Metrics: Key InsightsAdjusted earnings were 66 cents per share, up 8.2% from the year-ago quarter’s 61 cents. The bottom line beat the Zacks Consensus Estimate of 65 cents. Reported earnings per share were 67 cents compared with 56 cents in the prior-year quarter.Walmart Inc. Price, Consensus and EPS Surprise Walmart Inc. price-consensus-eps-surprise-chart | Walmart Inc. QuoteTotal revenues increased 7.3% year over year to $177.8 billion and topped the Zacks Consensus Estimate of $174.6 billion. On a constant-currency basis, revenues rose 5.9%. Net sales jumped 5.7% at cc, backed by strength in all units.Global e-commerce sales advanced 26%, driven by store-fulfilled pickup and delivery services along with marketplace expansion. E-commerce represented 23% of total net sales. Walmart’s global advertising business rose 37%, while Walmart U.S. advertising revenues increased 36%. Global membership fee revenues climbed 17.4%.The consolidated gross profit rate improved 6 basis points (bps) year over year to 24.3%, supported by a favorable merchandise category mix and higher-margin advertising contributions, partly offset by higher fuel costs in the supply chain. Adjusted operating income in constant currency increased 5.1%.Decoding Walmart’s Segmental PerformanceWalmart U.S.: Net sales increased 4.5% year over year to $117.2 billion. Comparable sales, excluding fuel, rose 4.1%, driven by a 3% increase in transactions and a 1.1% rise in average ticket. E-commerce contributed roughly 530 bps to comp sales growth. E-commerce sales surged 26%, supported by approximately 45% growth in store-fulfilled delivery, strong marketplace expansion and advertising momentum. Marketplace sales rose nearly 50%, marking the best performance in 10 quarters. Expedited deliveries completed in less than three hours represented around 36% of store-fulfilled orders. Walmart Connect revenues increased 44% excluding VIZIO. Broad-based share gains across categories and income groups, particularly among upper-income households, aided growth. Grocery and general merchandise categories remained strong, though pharmacy sales faced pressure from maximum fair pricing legislation. Private-brand sales grew in double digits during the quarter.Adjusted operating income increased 5.7% to $6 billion, benefiting from improved e-commerce economics, higher Walmart+ membership revenues and other income gains.Walmart International: Net sales increased 18% year over year to $35.1 billion. On a constant-currency basis, sales rose 10.1%, reflecting broad-based strength across markets. Currency fluctuations positively impacted reported sales by roughly $2.3 billion. E-commerce sales advanced 27%, led by store-fulfilled pickup and delivery services and marketplace growth. Digital penetration improved across markets, while membership income increased 31%. The advertising business grew 32%, fueled by strong momentum at Flipkart.China remained a standout market, with net sales in constant currency increasing 22.3% and e-commerce sales growing 31%. Strong Lunar New Year demand and double-digit transaction growth at Sam’s Club China supported results. Operating income increased 23.9% to $1.6 billion. On a constant-currency basis, operating income rose 10.2%, benefiting from lower e-commerce losses and favorable business mix changes.Sam’s Club U.S.: Net sales increased 6.1% year over year to $23.4 billion, while net sales excluding fuel rose 3.9%. Comparable sales excluding fuel grew 3.9%, supported by a 6.2% increase in transactions despite a 2.2% decline in average ticket. E-commerce sales rose 23%, driven by continued strength in club-fulfilled pickup and delivery. E-commerce contributed around 400 bps to comparable sales growth and represented roughly 20% of net sales excluding fuel. Scheduled club-fulfilled delivery jumped more than 90%.Membership and other income increased 11%, aided by growth in member counts, renewal rates and Plus memberships. Management also announced a membership fee increase effective May 1. Operating income edged up 1.2% to $674 million, though higher distribution and fulfillment costs related to delivery growth weighed on margins.Walmart’s Financial PositionWalmart ended the quarter with cash and cash equivalents of $10.7 billion and total debt of $58.1 billion. Operating cash flow declined to $4.7 billion. Free cash flow was negative $1.9 billion, reflecting higher capital expenditures to support omnichannel growth initiatives.During the quarter, Walmart repurchased 16.6 million shares worth $2.1 billion. The company has $28.2 billion remaining under its current share repurchase authorization.What to Expect From Walmart in Q2 & FY27?For the second quarter of fiscal 2027, Walmart expects net sales growth of 4-5% at cc and operating income growth of 7-10% at cc. Adjusted earnings per share are projected in the range of 72-74 cents.Management reiterated fiscal 2027 guidance, calling for net sales growth of 3.5-4.5% at cc and adjusted operating income growth of 6-8% at cc. Adjusted EPS is still expected in the range of $2.75-$2.85.Shares of this Zacks Rank #3 (Hold) company have gained 17.4% year to date compared with the industry’s growth of 19.8%.Key PicksKohl’s Corporation KSS operates department stores offering apparel, footwear, home products, and beauty merchandise across the United States. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.The Zacks Consensus Estimate for Kohl’s current fiscal-year sales and earnings calls for a decline of about 1% and 19.1%, respectively, from the year-ago reported numbers. KSS delivered a trailing four-quarter earnings surprise of 72.3%, on average.Dillard’s, Inc. DDS is a fashion apparel and home furnishings retailer operating department stores across the United States. The company carries a Zacks Rank #2 (Buy) at present. DDS delivered a trailing four-quarter earnings surprise of 27.9%, on average.The Zacks Consensus Estimate for Dillard’s current fiscal-year sales implies an increase of 1.2%, while the consensus mark for the current fiscal-year EPS suggests a 0.2% decline from the prior-year levels.Casey’s General Stores, Inc. CASY, a convenience store chain selling fuel, groceries and prepared foods in Midwestern communities, carries a Zacks Rank #2 at present. CASY delivered a trailing four-quarter average earnings surprise of nearly 20%.The Zacks Consensus Estimate for Casey’s General Stores’ current fiscal-year sales and earnings implies an increase of 8.6% and 24.6%, respectively, from the prior-year levels.Zacks' Research Chief Names "Stock Most Likely to Double"Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.This top pick is a little-known satellite-based communications firm. Space is projected to become a trillion dollar industry, and this company's customer base is growing fast. Analysts have forecasted a major revenue breakout in 2025. Of course, all our elite picks aren't winners but this one could far surpass earlier Zacks' Stocks Set to Double like Hims & Hers Health, which shot up +209%.Free: See Our Top Stock And 4 Runners UpThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks