Walmart (WMT) Q1 FY27 earnings call: guidance and Q&A

Enterprise and U.S. eCommerce incremental margins look consistent with recent high-single/low-double-digit ranges — what would let Walmart dial them up, especially if fuel stays elevated?

Rainey confirmed U.S. eCommerce incremental margins of ~12% in the quarter and framed the flywheel: speed drives frequency, which raises membership utility; membership plus advertising now comprise roughly one-third of earnings, providing recurring-revenue insulation against shocks like fuel. Furner added that core-business share gains enable the platform businesses, and merchants have many levers for the fuel environment.

“And the importance of speed, the reason to highlight that is fast fuels frequency.”

asked by Simeon Gutman (Morgan Stanley) · answered by John Rainey

How do you sustain the traffic acceleration (~3% Walmart U.S., ~6% Sam's), and would tariff rebates fund that momentum or offset rising energy costs?

Furner attributed traffic strength to merchandising, EDLP, general merchandise (fashion, beauty) and eCommerce speed — the ninth consecutive quarter of 20%+ U.S. eCommerce growth. Rainey said Walmart is pursuing IEEPA refunds and would prioritize investing any recovery into price given consumer fuel pressure and the retention/share gains being generated.

“we think the single best return that we can have on a $1 of capital right now is to invest in the customer and invest in price.”

asked by Gregory Melich (Evercore ISI) · answered by John Rainey

When will the alternative revenue platforms launched into Canada and Mexico contribute to enterprise margin?

No timing was given. Furner emphasized the 'build once and scale globally' approach for commerce solutions (advertising, membership, data ventures); Nicholas cited International's 27% eCommerce growth, 30% eCommerce penetration, and 30% growth in both membership and advertising — small bases growing fast.

“So they're small numbers, but they're growing fast, and we feel really confident about the impact that's having on the customer value proposition.”

asked by Katharine McShane (Goldman Sachs) · answered by Christopher Nicholas

Given repeated one-off external headwinds, should investors temper expectations for the double-digit operating income growth ambition outlined at the financial community meeting?

Rainey reiterated the Investor Day framework (~4% top line, roughly 4%-8% operating income growth) and rejected the need to temper expectations, noting incremental margins can reach double digits as U.S. eCommerce showed this quarter. He characterized tariffs last year and fuel this year as exogenous shocks, said marketplace, advertising and fulfillment services each had their best quarter of his tenure, and cautioned against fixating on one quarter.

“I want to be really clear, like we are probably as excited about the potential of our business today than at any point in time in the last few years.”

asked by Michael Lasser (UBS) · answered by John Rainey

With tax-refund benefits fading and fuel squeezing the low end, what is the consumer picture, and could grocery price competition mute fuel-driven inflation and pressure margins?

Rainey described a bifurcated consumer: high-income spending confidently, low-income budget-conscious — evidenced by average fuel fill-ups dropping below 10 gallons for the first time since 2022. Like-for-like inflation was a little over 1% with egg deflation contributing almost 100 bps of deflation; fertilizer inputs (nitrogen, phosphates) are exposed to the Strait of Hormuz closure, so persistent fuel prices could lift average unit retails, and egg-price lapping could raise printed inflation later in the year.

“we see that in the most recent period, the number of gallons that customers fill up with when they come to our fuel stations fell below 10 for the first time since 2022. That's an indication of stress.”

asked by Christopher Horvers (JPMorgan) · answered by John Rainey

Are competitors' price investments showing up in the market, how willing is Walmart to use its price gaps to defend share, and what tariff rates are built into guidance?

Furner said competitive pricing is perennial, highlighted the acceleration to ~7,200 live rollbacks versus a 5,000-5,500 range in recent years, and committed to EDLP as a trust-builder while expressing pride in Walmart's price gaps. On tariffs, Rainey said guidance generally assumes the current environment persists — no specific rates were disclosed.

“we will continue to operate in an everyday low price strategy across our business. That builds trust over time.”

asked by Paul Lejuez (Citigroup) · answered by John Furner

What is happening in the underlying Health & Wellness business, and is GLP-1 pricing pressure freeing consumer dollars for other categories?

Rainey attributed the moderation to maximum fair pricing legislation enacted in January — about a 100 bps headwind to comps, disproportionately hitting in-store (in-store comps would be positive excluding it). Guggina said Health & Wellness would have grown mid-to-high single digits ex-MFP, with prescription volumes growing, share of scripts increasing, and ~20% of Health & Wellness deliveries arriving in under 3 hours. The GLP-1 pricing question was not directly addressed.

“Excluding the impact of MFP, the business would have grown mid- to high single digits for health and wellness.”

asked by Seth Sigman (Barclays) · answered by David Guggina

How are private brands performing with this consumer, particularly in grocery and at Sam's Club?

Rainey disclosed penetration fell ~40 bps overall — food down a little more than 100 bps (largely eggs, a big private-brand item) while general merchandise rose almost 200 bps. Guggina highlighted Great Value's first major redesign in over a decade and newer brands (bettergoods, freshness guarantee) attracting higher-income customers; Watkins noted Member's Mark is in its second year as Sam's sole private brand, co-created with members, with half of member growth from millennial and Gen Z cohorts.

“The reason food is down is largely due to eggs. Eggs is a big private item for us.”

asked by Robert Drbul (BTIG) · answered by John Rainey

Why does Q2 operating income growth accelerate versus Q1 even with a full quarter of incremental fuel costs, and given merchandise margins won't repeat Q1's improvement?

Rainey walked the math: the 7%-10% constant-currency guide plus ~130 bps of FX tailwind implies almost 11.5% reported growth at the top end — double digits. He acknowledged a modest tailwind from lapping last year's elevated claims expense, and reiterated that the business accelerates through the year, with the guide held despite hundreds of millions of dollars of fuel pressure.

“you're really talking about an operating income growth on a reported basis of almost 11.5%, which by my estimation, is double digits.”

asked by Corey Carlo (Jefferies) · answered by John Rainey