Walmart Warns of Rising Consumer Pressure as Gas Prices Bite

CNBC reported Thursday that Walmart delivered a weaker-than-expected financial outlook for fiscal 2027. The results put fresh pressure on WMT shares and raised broad questions about the Walmart outlook gas prices environment facing U.S. shoppers.

Guidance Falls Short of Wall Street Targets

Walmart projected full-year adjusted earnings per share between $2.75 and $2.85. Analysts had expected $2.91, according to LSEG data. The retailer also forecast annual net sales growth of 3.5% to 4.5%.

Current-quarter guidance also disappointed. Walmart guided for adjusted EPS of 72 to 74 cents, short of the 75-cent consensus estimate. Quarterly net sales are expected to rise 4% to 5%.

WMT shares fell roughly 2% in premarket trading following the release.

First-Quarter Results Were a Mixed Bag

On the top line, Walmart delivered. Revenue climbed 7% year over year to $177.75 billion, ahead of the $174.98 billion analysts anticipated.

Same-store sales rose 4.1%, meeting expectations. E-commerce momentum and continued strength with higher-income shoppers supported the result.

Net income came in at $5.33 billion, or 67 cents per share. That compares with $4.49 billion a year earlier. Adjusted EPS of 66 cents matched the consensus estimate precisely. It was only the third time in 16 quarters that Walmart failed to beat the bottom-line figure.

Tax Refunds Masked the Pressure This Spring

CFO John David Rainey told CNBC that unusually strong tax refund activity helped cushion shoppers from elevated fuel costs during the first quarter. That cushion is now fading fast.

Rainey said those refunds are “largely not coming in” anymore. He expects consumers to feel the full weight of high fuel prices in the current quarter. Walmart absorbed a $175 million headwind from fuel in Q1 and anticipates that figure growing if pump prices remain elevated.

Target made a similar observation on Wednesday, suggesting tax returns may have temporarily flattered first-quarter spending across the sector.

Broader Consumer Backdrop Darkens

Walmart’s guidance arrives against a deteriorating consumer sentiment backdrop. Sentiment has fallen to fresh record lows in recent months. A new Middle East conflict and sustained pump prices have compounded household budget pressures.

Rainey struck a cautiously confident tone, noting the company’s Q2 operating income guidance is among the strongest it has issued in roughly 15 years. Still, the soft EPS forecast signals that margin pressures remain real and are not yet fully resolved.

Walmart remains a closely watched barometer for the health of the American consumer. Its next quarterly update will test whether the resilience seen this spring was structural or simply seasonal.

Read Next: Fed Holds Rates Steady as Inflation Data Stays Stubborn