Walmart's Q1 Earnings on the Horizon, Full-Year Guidance in Focus

Walmart is scheduled to report its first-quarter earnings before the market opens on Thursday (Eastern Time). In the current uncertain macroeconomic environment, the market's focus is not on the performance itself but on how the management will provide guidance for the year.

Wall Street expects Walmart to report earnings per share (EPS) of $0.66 for the first quarter, representing an 8.2% year-over-year increase; revenue is forecasted to grow by 5.6% to $174.84 billion.

In February of this year, Walmart's release of its earnings outlook for the current fiscal year fell below market expectations, disappointing investors. Since then, expectations for EPS have been revised down 22 times and up only 2 times, indicating a collectively conservative trend among analysts.

Tariff pressure and weakened consumer spending are two main themes that cannot be avoided in this earnings report. Walmart has clearly stated that households with an annual income of less than $50,000 are under strain, but the preference of high-income customers for rapid delivery services has helped the company maintain its market share.

Seeking Alpha analyst Brian Gilmartin pointed out that even if oil prices can provide some support for sales in certain categories, it is reasonable to expect Walmart to maintain a conservative stance in its guidance.

Piper Sandler analyst Peter Keith believes that Walmart remains in a favorable position in the current macro environment, with its FY27 outlook being reasonable and having the potential to exceed expectations.

Truist estimates that the supply chain cost pressure brought by rising oil prices falls within "controllable range," and the rapid growth of high-profit-margin revenue sources such as advertising and membership subscriptions will offset it.

Morgan Stanley's survey data in April shows that the number of Walmart+ members increased by about 3.9 million in March, reaching about 30.7 million, with the membership ecosystem continuing to expand.

Historically speaking, Walmart has had an 88% chance of exceeding EPS estimates during the past two years, and revenue has met or exceeded expectations 100% of the time.

So far this year, Walmart's stock price has increased by more than 20%, significantly outperforming the S&P 500's roughly 7% increase during the same period.