WMT 1Q27 First Take: On an absolute basis, results were solid — total revenue of $177.8bn (+7.3% YoY; cc +5.9%), beating the $174.8bn consensus.
However, fuel costs weighed on profitability, with OI up only 5%, lagging top-line growth. Full-year guidance was left unchanged and not revised up, which is a letdown for some investors given the 45x+ multiple for an 'omni-fulfillment + high-margin tech services' retail platform. Pre-mkt the stock fell ~2–3%, essentially pricing in a 'good, not great' print.
In detail:
1) Walmart U.S.: Volume acceleration is the highlight. Comps rose 4.1% (vs. 4% est.), a modest beat. More importantly, mix improved — transactions accelerated to +3.0% vs. +1.6% a year ago, while average ticket slowed to +1.1% from +2.8%, signaling a shift from price-led to traffic-led growth, a higher-quality trajectory.
E-comm grew 26%. Walmart Connect (ex VIZIO) +44%, Marketplace nearly +50% (best in 10 qtrs), showing the high-margin flywheel is still speeding up across the board. GM share hit a 5-year high, and penetration into higher-income households continues.
2) Sam's U.S.: Transaction surge, but ticket turned negative. Comps (ex fuel) +3.9%, with transactions +6.2% accelerating further, while average ticket -2.2% as mix shifted to lower-price, higher-frequency grocery and Member's Mark private-label substitution. E-comm +23%.
But OI grew only 1.2%, indicating higher fulfillment costs meaningfully constrained profit flow-through.
3) Walmart Intl.: China Sam's remains the brightest spot. By region, China grew 22.3% YoY, with Sam's still the primary growth engine. Transactions maintained double-digit growth and CNY performance was exceptionally strong, suggesting China Sam's remains in a triple upcycle of store expansion, strong same-store growth, and rising digital penetration.
Walmex (Mexico & C. America) grew 4.1% YoY, with growth slowing QoQ, likely dragged by 3P.
4) GP & OI: Ads help, fuel hurts. GPM was 25.1%, up 20bps YoY, driven mainly by advertising and category mix. On the expense side, higher fuel costs curtailed profit expansion (fuel shaved 250bps from OI growth).
Ex-fuel, underlying profit leverage looks decent.
5) Guide: No FY raise, but Q2 implies acceleration. Full-year guide unchanged (sales cc +3.5–4.5%, Adj. OI cc +6–8%). With Q2 Adj. OI guided to +7–10% cc, notably faster than Q1’s +5.1%, fuel headwinds are implied to ease sequentially. $Walmart(WMT.US)
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