Walmart Posts Slowest 4.1% Q1 Sales Growth, UBS Lowers Target to $141
Walmart posted Q1 comparable sales growth of 4.1% excluding fuel—the slowest in eight quarters—with operating income of $7.67 billion and EPS of $0.66. UBS cut its price target to $141, citing margin pressure despite $177.8 billion revenue, while Walmart reaffirmed Q2 sales growth of 4–5% and profit expansion of 7–10%.
1. Q1 Results and Comparable Sales
Walmart reported fiscal first-quarter comparable sales growth of 4.1% excluding fuel, marking the slowest pace in eight quarters. The retailer generated operating income of $7.67 billion and delivered earnings per share of $0.66.
2. High-Margin Segment Performance
E-commerce revenue rose 26% year over year, while marketplace sales surged 50%, driving a ninth consecutive quarter of more than 20% online growth. Membership income climbed 17.4% and advertising revenue increased 37%, with these higher-margin businesses now contributing roughly one-third of total profits.
3. Price Target Reduction and Margin Pressure
UBS lowered its price target on Walmart to $141 from $147, citing significant margin pressure from rising costs and intensifying competition. The adjustment suggests caution despite solid top-line performance and reinforces investor focus on profitability challenges.
4. Guidance Reaffirmation
For the second quarter, Walmart reaffirmed guidance for sales growth of 4% to 5% in constant currency and operating profit expansion of 7% to 10%. Management indicated full-year sales are expected at the high end of existing forecasts, underscoring confidence in long-term growth drivers.