Why did Walmart withhold quarterly operating income and EPS guidance for Q2?

Management said the range of near-term outcomes is exceedingly wide and difficult to predict given the dynamic operating environment, including tariffs, trade policy, and macroeconomic uncertainty. It chose to guide only Q2 net sales (cc) growth of 3.5% to 4.5% and expressed confidence in achieving full-year fiscal 2026 targets.

Did Walmart change its fiscal 2026 guidance?

No. Full-year fiscal 2026 guidance was unchanged from the February 20, 2025 outlook: net sales (cc) growth of 3.0% to 4.0%, adjusted operating income (cc) growth of 3.5% to 5.5%, adjusted EPS of $2.50 to $2.60, and capital expenditures of approximately 3.0% to 3.5% of net sales. The guidance includes a tailwind from VIZIO on sales and a headwind on operating income.

Why is GAAP EPS lower than adjusted EPS, and what drove the difference?

GAAP EPS of $0.56 includes a $0.07 pre-tax loss on equity and other investments, primarily driven by a decline in the stock price of Symbotic. Walmart excludes these fair-value changes from adjusted EPS, which therefore came in at $0.61. Management argues that the investments are strategic and that their performance should be judged on operations rather than market value.

How is Walmart's cash flow and capital allocation trending?

Operating cash flow rose to $5.4 billion, and free cash flow improved to $0.4 billion, though capital expenditures increased by $0.3 billion to support investment strategy. The company returned $6.4 billion to shareholders in the quarter, including $4.6 billion in buybacks (50.4 million shares at an average of $90.35) and $1.9 billion in dividends, leaving $7.5 billion remaining on the buyback authorization. It also raised $4 billion of long-term debt.

What does the 8-K's headquarters relocation mean for investors?

Effective May 15, 2025, Walmart moved its corporate headquarters and principal executive offices to 1 Customer Drive, Bentonville, Arkansas, from 702 S.W. 8th Street. The telephone number is unchanged, and shareholder correspondence should be sent to the new address. The move is administrative and does not by itself affect financial results or guidance.

WMT 8-K: Earnings & Results

01—Abstract

Summary

Summary of the 8-K filed May 15, 2025. Cited figures are marked; the original filing is the authoritative source.

Walmart's first-quarter fiscal 2026 results (quarter ended April 30, 2025) show steady top-line and profit growth despite a difficult backdrop.

Total revenues rose 2.5% to $165.6 billion^a (up 4.0% in constant currency), and operating income increased 4.3% to $7.1 billion, or 3.0% on an adjusted constant-currency basis. Growth was led by Walmart U.S. comparable sales of 4.5%, eCommerce up 22% globally, and a 50% increase in the global advertising business (including VIZIO). Reported GAAP EPS was $0.56, down 11.1% year over year, because of a $0.07 pre-tax net loss on equity and other investments; adjusted EPS of $0.61 rose 1.7%.

Cash generation improved meaningfully. Operating cash flow was $5.4 billion^b, up $1.2 billion, and free cash flow reached $0.4 billion, up $0.9 billion, though capital expenditures rose to support investment. Inventory increased 3.8% to $57.5 billion, and the company repurchased $4.6 billion of stock while raising $4 billion of long-term debt at favorable rates.

Return on investment improved 30 bps to 15.3%^c, while return on assets declined to 7.5% because of higher asset levels from capital spending. For guidance, management issued second-quarter net sales growth of 3.5% to 4.5% in constant currency but declined to give specific operating income or EPS guidance for the quarter, citing an exceedingly wide and hard-to-predict range of outcomes.

Full-year fiscal 2026 guidance was reiterated without change, including constant-currency net sales growth of 3.0% to 4.0%, adjusted operating income growth of 3.5% to 5.5%, and adjusted EPS of $2.50 to $2.60^d. The 8-K also disclosed a relocation of the corporate headquarters to 1 Customer Drive, Bentonville, Arkansas, effective May 15, 2025.

02—Key points

Key Highlights

Revenue rose 2.5% to $165.6 billion (4.0% in constant currency), with currency fluctuations reducing sales by roughly $2.4 billion.
Walmart U.S. comparable sales grew 4.5%, driven by health & wellness, grocery, and higher transaction counts; eCommerce grew 21% in the segment.
Global eCommerce sales rose 22%, and the global advertising business grew 50% (including VIZIO), with Walmart Connect in the U.S. up 31%.
GAAP EPS was $0.56 (down 11.1%), while adjusted EPS was $0.61 (up 1.7%) after excluding a $0.05 net after-tax loss on equity investments.
Free cash flow improved to $0.4 billion from negative $0.4 billion a year earlier; operating cash flow rose $1.2 billion to $5.4 billion.
Management guided Q2 net sales growth of 3.5% to 4.5% (cc) but withheld quarterly operating income and EPS guidance, while reiterating full-year fiscal 2026 outlook.
International operating income (cc) declined 6.4% due to strategic growth investments in Flipkart, Walmex, and Canada, and Sam's Club U.S. operating income rose 11.5%.

03—Questions

Frequently Asked Questions

Why did Walmart withhold quarterly operating income and EPS guidance for Q2?
Management said the range of near-term outcomes is exceedingly wide and difficult to predict given the dynamic operating environment, including tariffs, trade policy, and macroeconomic uncertainty. It chose to guide only Q2 net sales (cc) growth of 3.5% to 4.5% and expressed confidence in achieving full-year fiscal 2026 targets.
Did Walmart change its fiscal 2026 guidance?
No. Full-year fiscal 2026 guidance was unchanged from the February 20, 2025 outlook: net sales (cc) growth of 3.0% to 4.0%, adjusted operating income (cc) growth of 3.5% to 5.5%, adjusted EPS of $2.50 to $2.60, and capital expenditures of approximately 3.0% to 3.5% of net sales. The guidance includes a tailwind from VIZIO on sales and a headwind on operating income.
Why is GAAP EPS lower than adjusted EPS, and what drove the difference?
GAAP EPS of $0.56 includes a $0.07 pre-tax loss on equity and other investments, primarily driven by a decline in the stock price of Symbotic. Walmart excludes these fair-value changes from adjusted EPS, which therefore came in at $0.61. Management argues that the investments are strategic and that their performance should be judged on operations rather than market value.
How is Walmart's cash flow and capital allocation trending?
Operating cash flow rose to $5.4 billion, and free cash flow improved to $0.4 billion, though capital expenditures increased by $0.3 billion to support investment strategy. The company returned $6.4 billion to shareholders in the quarter, including $4.6 billion in buybacks (50.4 million shares at an average of $90.35) and $1.9 billion in dividends, leaving $7.5 billion remaining on the buyback authorization. It also raised $4 billion of long-term debt.
What does the 8-K's headquarters relocation mean for investors?
Effective May 15, 2025, Walmart moved its corporate headquarters and principal executive offices to 1 Customer Drive, Bentonville, Arkansas, from 702 S.W. 8th Street. The telephone number is unchanged, and shareholder correspondence should be sent to the new address. The move is administrative and does not by itself affect financial results or guidance.

04—Continue

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