Walmart Shares Sighed After a May Pullback, but Analysts Point to Upside After Q1 Strength

Walmart Inc.’s stock pulled back in May, even as the retailer reported an improving first quarter that reinforced its push beyond basic grocery and general merchandise. A June 7 market report said Walmart shares fell 12% during May and that analysts were still looking for upside of at least 25% over the next year.

That renewed optimism landed after Walmart released first-quarter fiscal 2027 results on May 21. The company reported revenue growth of 7.3% year over year to $177.8 billion, with e-commerce sales up 26% globally. Walmart also said Walmart U.S. comparable sales grew 4.1% (excluding fuel), and the quarter showed bottom-line improvement, with GAAP earnings per share of $0.67 and adjusted EPS of $0.66.

Investors also focused on profitability and cost pressure. Walmart said operating income rose 5.0% (up 5.1% adjusted in constant currency) and that results were negatively affected by 250 basis points from higher fuel costs in distribution and fulfillment. In other words, the business grew, but margins faced a specific external headwind that Walmart has been monitoring closely.

Walmart’s update included more than headline sales growth. The company reported it ended the quarter with $10.7 billion in cash and repurchased 16.6 million shares during the quarter for $2.1 billion. Walmart also said it had $28.2 billion remaining under the $30 billion repurchase authorization announced earlier, reflecting continued capital return even as management guides through a tougher cost environment.

Looking ahead, Walmart issued guidance for its second quarter and fiscal 2027. For the second quarter, Walmart expected net sales to increase 4% to 5% year over year, and adjusted EPS in the range of $0.72 to $0.74. For the full fiscal year, Walmart reiterated its outlook, projecting net sales growth of 3.5% to 4.5% and adjusted operating income growth of 6% to 8% in constant currency.

Beyond the numbers, analysts appear to be leaning on Walmart’s ongoing strategy of layering higher-margin and recurring revenue streams on top of its scale. In its earnings materials, Walmart emphasized continued momentum in e-commerce economics, advertising, and membership fee revenue, as well as the operating discipline needed to manage fuel and other expense swings.

Still, the bullish framing is not without uncertainty. Walmart did not eliminate the key swing factor that weighed on the quarter, namely higher fuel costs, and the company’s guidance is framed with forward-looking risk language and assumptions that can shift quickly with transportation rates and broader consumer conditions. What to watch next is whether Walmart’s second-quarter outlook translates into stable operating leverage as those cost pressures evolve.