Walmart Inc. (NASDAQ: WMT) announced robust first-quarter results, with revenue reaching $177.8 billion, a 7.3% increase compared to the previous year. The growth was largely driven by a 26% surge in global e-commerce sales, highlighting the success of Walmart's omnichannel strategy. Walmart U. S. comp sales also saw a solid 4.1% increase.
However, rising fuel costs in distribution and fulfillment negatively impacted operating income by 250 basis points. Despite this challenge, the company issued guidance for the second quarter, projecting net sales growth of 4% to 5% and adjusted operating income growth of 7% to 10%, both in constant currency. Adjusted EPS is expected to be in the range of $0.72 to $0.74.
Analysts are updating their forecasts based on these results. While Walmart exceeded revenue expectations, its Q2 revenue guidance of $185.4 billion fell slightly below analyst estimates of $186.4 billion. The company's non-GAAP profit of $0.66 per share was in line with expectations. Despite a cautious outlook, Morgan Stanley analysts maintain an "Overweight" rating on Walmart, with a price target of $140, citing the company's "eCommerce flywheel" and ability to leverage inflation to widen its grocery moat.
Looking ahead, investors will be watching Walmart's ability to sustain its e-commerce growth and manage rising costs. The company's investments in technology, supply chain automation, and store remodels are expected to play a crucial role in driving future growth and profitability. According to MarketBeat, the average 12-month price target from 36 analysts is $138.71, suggesting a potential upside of over 15% from the current price.
