WMT Stock Falls Pre-Market After Walmart's Q2 Outlook Disappoints Investors — CFO Sees Higher Fuel Prices Hurting Consumers

• Walmart expects Q2 earnings per share to be in the range of $0.72 to $0.74, below the $0.75 EPS that Wall Street analysts expected.
• Rainey flagged a $175 million headwind due to higher fuel prices, while adding that this is the best Q2 guidance for operating income in a decade and a half.
• He also said that Walmart’s operating income in Q2 could be higher than the company forecasted if fuel prices remain where they are.

Shares of Walmart Inc. (WMT) fell nearly 3% in Thursday’s pre-market trade after the retail giant’s second-quarter (Q2) outlook fell short of Wall Street expectations.

Walmart expects earnings per share (EPS) in Q2 to be in the range of $0.72 to $0.74, below the $0.75 EPS that Wall Street analysts had expected, according to Fiscal.ai data.

The company expects sales to rise between 4% and 5% and operating income to grow between 7% and 10%.

WMT CFO Warns Of Pressure From Higher Fuel Prices

During an interview with CNBC, Walmart CFO John David Rainey said that consumers might feel the pinch of higher fuel prices in Q2 as the tax return boost fades.

“I think higher tax returns muted some of the pressure related to higher fuel prices and as we’re in a period of time right now where those tax refunds are largely not coming in, I think consumers are going to feel more of that pressure from higher fuel prices,” said Rainey.

Rainey flagged a $175 million headwind due to higher fuel prices, while adding that this is the best Q2 guidance for operating income in a decade and a half.

He also said that Walmart’s operating income in Q2 could be higher than the company forecasted if fuel prices remain where they are.

According to AAA Gas Prices, the national average for a gallon of gasoline is currently $4.564, about 50% higher than when the Iran war began in February this year.

WMT’s Q1 At A Glance

Walmart reported EPS of $0.66 on revenue of $177.8 billion, compared to Wall Street estimates of an EPS of $0.66 on revenue of $174.84 billion.

Walmart reported an EPS of $0.56 on revenue of $163.98 billion during the year-ago period.

The retailer reaffirmed its fiscal year 2027 earnings outlook, expecting EPS in the range of $2.75 to $2.85. However, it is lower than the consensus estimate of $2.92.

How Did Retail Investors React To WMT?

Retail sentiment on Stocktwits around Walmart trended in the ‘extremely bullish’ territory with message volumes at ‘high’ levels at the time of writing.

One user believes Walmart’s valuations are too high.

WMT stock is up 17% year-to-date and 34% over the past 12 months. The S&P 500 ETF (SPY) is up 25% over the past 12 months, while the Invesco QQQ Trust (QQQ) is up 37%.

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