Walmart Inc. ( WMT ) stock traded lower Thursday after the retail giant reported first-quarter results that topped revenue estimates but reaffirmed full-year guidance below Wall Street expectations.

Earnings Beat Expectations, But Guidance Disappoints

Adjusted earnings came in at 66 cents per share, matching analyst estimates. Revenue increased 7.3% year over year, or 5.9% in constant currency, to $177.8 billion, ahead of consensus estimates of $175.0 billion.

Gross margin expanded by 6 basis points, driven primarily by strength in the U.S. business, while adjusted operating income rose 5.7% from a year earlier.

Operating cash flow totaled $4.7 billion during the quarter, while free cash flow was negative $1.9 billion.

Walmart U.S. E-Commerce And Marketplace Growth Accelerate

At Walmart U.S., revenue increased 4.5% to $117.2 billion as e-commerce sales climbed 26%. Growth was fueled by a 45% increase in store-fulfilled delivery, a 36% rise in advertising revenue and roughly 50% growth in Marketplace sales, marking the segment’s strongest performance in 10 quarters.

International And Sam’s Club Sales Remain Strong

International sales rose 10.1% to $32.8 billion, supported by continued momentum in e-commerce and store traffic.

Meanwhile, Sam’s Club U.S. revenue increased 6.1% to $23.4 billion, helped by strength in grocery and general merchandise categories.

The company said Walmart U.S. revenue growth faced a roughly 100-basis-point headwind tied to pharmacy pricing changes. Comparable sales increased 4.1% at Walmart U.S. and 3.9% at Sam’s Club, excluding fuel.

Advertising And Membership Revenue Continue Expanding

Global advertising revenue climbed 37% year over year, including a 36% increase in Walmart U.S. advertising sales. Membership fee revenue rose 17.4% globally.

Walmart Reaffirms Fiscal 2027 Outlook Below Wall Street Estimates

Looking ahead, Walmart ( WMT ) forecast second-quarter adjusted earnings of 72 cents to 74 cents per share, below analyst expectations of 75 cents. The company also projected quarterly revenue of $182.8 billion to $184.6 billion, trailing consensus estimates of $186.4 billion.

Walmart ( WMT ) reaffirmed fiscal 2027 guidance, projecting adjusted earnings of $2.75 to $2.85 per share on revenue of $731.1 billion to $738.2 billion. Both ranges remain below Wall Street forecasts of $2.94 per share and $742.6 billion in revenue.

During the conference call, Walmart CFO said that if the current elevated cost environment persists, the company expects somewhat higher retail price inflation in the second quarter and the second half of the year.

Walmart Stock Performance

WMT Price Action: Walmart ( WMT ) shares were down 3.60% at $126.14 during premarket trading on Thursday, according to Benzinga Pro data.