Walmart Beats Sales Targets but Lowers Outlook on Consumer Strain

Walmart delivered stronger-than-expected revenue in its fiscal first quarter while signaling that higher fuel costs and broader economic uncertainty may weigh on shoppers ahead. The results underscore the retailer’s continued ability to draw customers across income levels even as households face rising gas prices and lingering effects from inflation and global conflicts.

Revenue reached $177.8 billion, up 7 percent from a year earlier and above analyst forecasts of $174.98 billion, according to LSEG data. Adjusted earnings per share came in at 66 cents, matching expectations. Global e-commerce sales jumped 26 percent and advertising revenue rose 37 percent, both high-margin areas that help offset cost pressures. The company also reported net income of $5.33 billion, or 67 cents per share.

Yet Walmart lowered its guidance for the current quarter and full year. It now expects adjusted earnings per share between 72 and 74 cents for the second quarter, below the 75 cents analysts had projected, and full-year adjusted earnings per share of $2.75 to $2.85 versus prior expectations near $2.91. Net sales are still projected to grow 3.5 to 4.5 percent for the year. Finance chief John David Rainey told CNBC the company absorbed a $175 million fuel-price headwind in the first quarter and anticipates a larger impact ahead, though it kept its operating-income outlook intact.

Rainey noted that tax refunds had temporarily eased pressure on lower-income households but that effect is fading. He said Walmart continues to see strength with higher-income shoppers while lower-income customers remain sensitive to everyday costs. The company stood by its annual sales forecast despite the softer profit outlook.

Shares fell about 2 percent in premarket trading after the report. Other retailers have similarly described resilient spending so far this year, though several have flagged potential softening once one-time boosts disappear.