Walmart Q1 FY27: Sales Beat on eCommerce Strength, but Stock Sold Off 7%

Transcript intelligence

What changed

Revenue of $177.75B beat the $174.84B consensus by 1.66%, and EPS of $0.66 was essentially in line with the $0.659 estimate. Constant-currency sales growth of ~6% surpassed the top end of guidance. eCommerce grew 26% and U.S. marketplace sales rose ~50%. Advertising revenue increased 37% globally, representing roughly one-third of operating income alongside membership fees. Sparky weekly active users more than doubled quarter-over-quarter with a 40% AI capability boost, generating 35% higher average order values. Walmart completed its 1 millionth drone delivery, with 40% occurring in Q1 alone. 30-minute delivery now reaches roughly 60% of the U.S. population. Management deployed approximately 7,200 rollbacks to offset fuel price headwinds. Capex outlook shifted from stable to increasing, reflecting continued investment in automation and fulfillment. Compared to the prior quarter, eCommerce growth accelerated from 24% to 26%, Sparky adoption continued scaling, and the cross-border marketplace launched in Canada and Mexico.

Guidance delta

Full-year FY27 guidance was reaffirmed: 3.5-4.5% sales growth and 6-8% operating income growth. Q2 operating income is expected to grow 7-10%. Capex outlook shifted from stable in the prior quarter to increasing, reflecting continued investment in automation and fulfillment infrastructure. Guidance sentiment was maintained.

Key takeaways

• Constant-currency sales grew ~6%, beating the top end of guidance, with eCommerce up 26% and U.S. marketplace sales up ~50%.
• Advertising revenue rose 37% globally and now represents about one-third of operating income alongside membership fees.
• Sparky weekly active users more than doubled, driving 35% higher average order values and deeper customer engagement.
• Full-year guidance reaffirmed at 3.5-4.5% sales growth and 6-8% operating income growth; Q2 operating income expected to grow 7-10%.
• The stock fell 7.3% on the report with volume 3.2x baseline, followed by a further 3.4% drift, despite the top-line beat.

Management priorities

• Scale AI capabilities and further integrate Sparky across app, web, and in-store experiences.
• Accelerate rollout of 30-minute and under-1-hour delivery to additional U.S. markets.
• Expand Marketplace cross-border presence and increase seller assortment.
• Continue automation retrofits of regional distribution centers and fulfillment centers.
• Enhance membership value proposition with new benefits such as Dynamic Express Delivery.