Walmart (WMT) is scheduled to report their Q1 ’27 financial results before the opening bell on Thursday, May 21, ’26.
Consensus sell-side expectations are for $174.95 billion in revenue, $7.75 billion in operating income and $0.66 in EPS for “expected” y-o-y growth of 5.6%, 8.8% and 8.2%.
Last quarter – Q4 ’26 ended January ’26 – Walmart reported 5.6% revenue growth, 12% operating income growth and 12% EPS growth y-o-y.
Morningstar’s analysis after the Feb ’27 earnings release had an interesting note: Global advertising now accounts for 25% of WMT’s total EBIT.
Advertising was known to be growing at a 20% rate annually, but the fact that’s its now 20% of EBIT ( I still refer to it as operating income) was a positive surprise.
Valuation is still the biggest so-called negative around Walmart when looking at general commentary. WMT is trading at roughly 46x expected ’27 earnings for 10% EPS growth this year, on 6% expected revenue growth. Price to sales is back up to 1.5x for WMT; WMT and COST for years had a price-to-sales or price-to-revenue below 1x, but that’s been put to rest with the Walmart rally since 2023.
Summary: This is a short Walmart earnings preview, but the first since the Iran conflict started, and the price of WTI crude has regularly been over $100 per barrel. Like McDonald’s, Walmart does have a lower-end consumer as regular shoppers, but the fact is the mass-merchant retail giant has been attracting a higher demographic the last few years. One reason may be e-commerce: Walmart seems to have exploited a niche in “expedited delivery” (i.e. higher priced delivery cost for a product that is urgently needed) and it seems to be working.
Ecommerce grew 28% globally for WMT, and is now profitable at the Sam’s segment level.
If Walmart doesn’t lower guidance thanks to gas prices hitting some level of sales, at the very least expect Walmart to be conservative with guidance.
A 10% – 15% selloff in the stock would be perfect, but it may not happen given Walmart’s ability to execute quarter-in, and quarter-out.
This is Walmart’s first earnings report post the Iraq conflict.
Let’s see the impact – if any – the high gas prices have had.
The stock is up 20% YTD (Monday night, 5/18/26 close.)
None of this is advice or a recommendation, but only an opinion. Past performance is no guarantee of future results.
Thanks for reading.