What Happened:

Shares of retail behemoth Walmart (NYSE:WMT) jumped 7% in the morning session after the company reported first-quarter earnings that constituted a 'beat and raise'. Specifically, Walmart exceeded analysts' revenue, gross margin, and EPS expectations. That performance was driven by beats in its U.S. and International Walmart operations. The company also effectively raised its full year guidance by saying that it expects calendar 2024 results to come in at the high end of previously-provided guidance for revenue and EPS, which is a positive. The company also bought TV maker Vizio for just over $2 billion in February 2024 to support Walmart Connect, its media business, although this is having a negligible impact on reported financials. Zooming out, we think the company had a solid quarter.

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What is the market telling us:

Walmart's shares are not very volatile than the market average and over the last year have had only a move greater than 5%. In context of that, today's move is indicating the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business. 

The biggest move we wrote about over the last year was 6 months ago, when the stock dropped 6.2% on the news that the company reported third quarter results and provided full-year adjusted EPS forecast that missed analysts' expectations. This was the major negative driving the stock down. During the earnings call, Walmart noted "a slowdown in purchasing activity in the second half of October." 

On the other hand, revenue outperformed Wall Street's estimates during the quarter, driven by better-than-expected same-store sales growth. 

Overall, it was a mixed quarter, with the cautious commentary on the near-term demand outlook provided during the earning call likely to raise concerns among investors.

Walmart is up 19.4% since the beginning of the year. Investors who bought $1,000 worth of Walmart's shares 5 years ago would now be looking at an investment worth $1,877.

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