Key Highlights

  • Walmart U.S. first-quarter fiscal 2027 comparable store sales (excluding fuel)grew 4.1%, driven primarily by strong growth in groceries and general merchandise.
  • Walmart U.S. grocery category achieved mid-single-digit comparable store growth in the first quarter, with fresh and staple food items leading performance.
  • The company stated that recent federal government adjustments to certain drug payment methods weighed on comparable store sales—achallenge that has also impacted other retailers' financial results. Chief Financial Officer John David Rainey noted during Thursday morning's earnings call that legislation related to the Inflation Reduction Act had a 100 basis point negative impact on first-quarter comparable store sales.

Deeper Insights

Walmart President and CEO John Furner told investors that the company recorded its strongest transaction growth in the U.S. market over the past six quarters, with e-commerce sales also seeing robust growth.

Furner said Walmart is focusing on price investments to alleviate the ongoing financial pressure on consumers. The retailer has extended temporary price reductions implemented last year, with 7,200 price cuts now in effect. He also mentioned that the company recently launched a set of grilling essential bundles that serve eight people at a cost of less than $5 per person.

"This is an industry, especially in the food sector, where everyone is looking for value, and it has been going on for a long time," Furner said.

Fast delivery is another capability Walmart uses to meet consumer needs. Walmart can reach approximately 60% of the U.S. population within 30 minutes or less. In the first quarter, orders delivered within three hours accounted for about one-third of store-fulfilled orders.

"Fast delivery increases purchase frequency. When we can deliver at the time customers expect, we see significantly higher customer engagement," Furner added, noting that customer engagement "enhances the utility of our membership programs."

Walmart U.S. e-commerce sales grew 26% in the first quarter—roughly flat compared tothe previous quarter's growth rate. Furner pointed out that about half of order volume at Walmart U.S. e-commerce fulfillment centers is now automated, and more than half of regional distribution centers are undergoing renovations at various stages.

Despite recent increases in fuel costs, company executives reaffirmed the full-year guidance provided in February.

While executives told investors they believe Walmart has diversified its business and built a sufficiently strong customer value proposition to withstand economic pressures, Rainey also cautioned that the company is "not immune to some of the things happening in the economy."

With the ongoing crisis in the Strait of Hormuz, Rainey told investors that if fuel prices remain elevated, Walmart could begin to see greater pressure on average retail prices per item, and that fertilizer, nitrogen, and phosphate cannot be shipped through the strait, potentially affecting the food and agriculture sectors.

"[Everyday low prices] are our core... If the current high-cost environment persists, we expect retail price inflation to rise somewhat in the second quarter and the second half of the year," Rainey said.