01—Abstract
Summary
Summary of the 8-K filed May 21, 2026. Cited figures are marked; the original filing is the authoritative source.
Walmart reported first-quarter fiscal 2027 results (three months ended April 30, 2026) that showed solid top-line momentum but pressure on cash flow and margins.
Total revenues rose 7.3% to $177.8 billiona (5.9% in constant currency), with global eCommerce sales up 26% and the global advertising business up 37%. GAAP operating income grew 5.0% to $7.5 billion, or 5.1% on an adjusted constant-currency basis, held back by roughly 250 basis points from higher fuel costs in distribution and fulfillment. GAAP EPS was $0.67 and adjusted EPS was $0.66, up 8.2% year over year, with the adjustment reflecting a $0.02 net gain on equity investments and a $0.01 charge for business reorganization.
Cash generation weakened sharply. Operating cash flow fell $0.7 billion to $4.7 billionb, mainly on inventory build, and capital expenditures rose $1.7 billion to support the omnichannel strategy, pushing free cash flow to negative $1.9 billion. Inventory increased 8.9% to $62.6 billion, and total debt reached $58.1 billion after the company raised $4.25 billion of long-term debt.
Management also repurchased $2.1 billionc of stock and continues to hold $28.2 billion of remaining buyback authorization. For the outlook, Walmart guided second-quarter net sales growth of 4% to 5% (constant currency), operating income growth of 7% to 10%, and adjusted EPS of $0.72 to $0.74. The full-year fiscal 2027 guidance was left unchanged, including adjusted EPS of $2.75 to $2.85.
Guidance excludes any potential benefit from IEEPA tariff refunds. Investors will likely focus on whether the inventory build and elevated capex normalize, and on how fuel costs and healthcare expenses continue to weigh on margins.
02—Key points
Key Highlights
- Total revenues grew 7.3% to $177.8 billion (5.9% constant currency), with Walmart U.S. comp sales up 4.1% and global eCommerce up 26%.
- GAAP operating income rose 5.0% to $7.5 billion; adjusted constant-currency operating income rose 5.1%, but about 250 bps of operating income was absorbed by higher fuel costs.
- GAAP diluted EPS was $0.67 and adjusted EPS was $0.66, up 8.2% year over year, excluding a $0.02 net equity investment gain and a $0.01 reorganization charge.
- Free cash flow turned negative at -$1.9 billion (down $2.4 billion), driven by a $1.7 billion increase in capex and a $0.7 billion decline in operating cash flow to $4.7 billion.
- Inventory increased 8.9% to $62.6 billion, and total debt reached $58.1 billion after $4.25 billion of new long-term debt issuance.
- Q2 FY27 guidance calls for 4% to 5% net sales growth (cc), 7% to 10% operating income growth (cc), and adjusted EPS of $0.72 to $0.74; full-year FY27 guidance was reiterated unchanged.
- Walmart repurchased 16.6 million shares for $2.1 billion in the quarter, with $28.2 billion of authorization remaining.
03—Questions
Frequently Asked Questions
Did Walmart change its fiscal 2027 outlook?
No. The company reiterated its full-year FY27 guidance, including net sales growth of 3.5% to 4.5% (cc), adjusted operating income growth of 6% to 8% (cc), and adjusted EPS of $2.75 to $2.85. It issued new guidance only for the second quarter, and that guidance does not assume any benefit from IEEPA tariff refunds.
Why did free cash flow turn negative this quarter?
Free cash flow was negative $1.9 billion because capital expenditures rose $1.7 billion to $6.7 billion to support the omnichannel growth strategy, and operating cash flow fell $0.7 billion to $4.7 billion, mainly due to timing of inventory receipts. Management attributed the operating cash flow decline primarily to inventory timing, partly offset by timing of certain payments.
What was the main drag on profitability in the quarter?
Higher fuel costs in distribution and fulfillment reduced operating income by roughly 250 basis points. Operating expense deleverage from higher depreciation and U.S. healthcare costs also weighed on margins, while gross profit rate rose 6 basis points, helped by business mix and advertising growth.
Is the adjusted EPS figure comparable to GAAP results?
Adjusted EPS of $0.66 is above GAAP EPS of $0.67 only because of the net effect of adjustments: a $0.02 gain on equity and other investments was removed, and a $0.01 business reorganization charge was added back. Investors should note that the investment gain is volatile and that management does not forecast it, so GAAP results can swing with the fair value of holdings such as Symbotic.
What drove the increase in Walmart's debt and inventory?
Total debt rose to $58.1 billion after the company raised $4.25 billion in long-term debt at favorable rates for general corporate purposes. Inventory rose $5.1 billion to $62.6 billion, reflecting timing of receipts, strong grocery unit demand in Walmart U.S., and higher fuel inventory, including the fuel upstreaming arrangement at Sam's Club.
04—Continue