Walmart on Thursday delivered a softer-than-expected fiscal 2027 profit outlook, guiding to adjusted earnings per share of $2.75 to $2.85 for the year against analyst consensus of $2.91. Current-quarter guidance was similarly cautious, at $0.72 to $0.74 per share versus $0.75 expected. The stock fell roughly 4 per cent in pre-market trade.
Net sales for the May quarter rose 4.2 per cent in constant currency to $169.8 billion, in line with expectations, with the international unit and Walmart Connect advertising both posting double-digit growth. US comparable sales ex-fuel rose 3.6 per cent, slightly below the company's own internal forecast.
On the post-results call, chief executive Doug McMillon for the first time quantified the company's expected 2026 tariff exposure at "between $5.5 and $7 billion of incremental cost-of-goods pressure", with two-thirds of that figure attributable to consumer-electronics, household-appliance and seasonal-apparel categories.
Mr McMillon said Walmart would absorb "a meaningful portion" of the tariff burden through supplier negotiation and private-label substitution, but conceded the company would also be pushing through "selective" retail-price increases on tariff-exposed SKUs in the second half. The company also flagged a softening in the higher-end of its discretionary basket, particularly in the South-East and the Southwest US.
The cautious tone landed with broader macro consequence because Walmart's 4,600 US stores serve roughly 90 per cent of the country's population in a typical month, making its quarterly read one of the cleanest barometers of the US consumer. Treasury yields ticked lower on the print and the S&P 500 staples sub-index dropped 0.8 per cent.
Walmart raised its quarterly dividend by 13 per cent and reaffirmed plans for $4.5 billion of share repurchases through fiscal 2027. The capital-return programme was, in the words of one Bernstein analyst, "the cleanest signal in an otherwise sceptical print".