Walmart Q1 revenue up 7.3% to $177.8B; opioid cases halved, new FTC driver suit filed

The number of opioid-related cases in the MDL decreased from approximately 250 to approximately 130, a reduction of roughly 48%. This suggests significant case resolution activity, likely through settlements, dismissals, or consolidations over the past year.

The company now lists all 13 non-MDL opioid cases individually in the filing body, whereas the baseline referenced "more than 10" cases and directed readers to Exhibit 99.1. This change improves transparency by making case details directly accessible in the main filing.

The opioid-related securities class action litigation, which was on appeal to the Third Circuit as of the baseline filing, is no longer disclosed. This suggests the case was resolved, dismissed, or otherwise concluded between the two reporting periods.

The FTC money transfer agent services case, which was on appeal to the Seventh Circuit as of the baseline, is no longer disclosed. This indicates the litigation was resolved or concluded during the intervening period.

A new FTC case involving state attorneys general as co-plaintiffs was filed in February 2026 in the Northern District of California. This appears to be a broader regulatory action than the prior CFPB matter, now involving multiple enforcement agencies and potentially wider scope.

Walmart disclosed for the first time that it is seeking refunds of tariffs paid under the International Emergency Economic Powers Act through a U.S. Customs and Border Protection process. The company emphasized that timing, amounts, and ultimate resolution remain uncertain, and no amounts were recognized in the current quarter. This is a new disclosure not present in the prior-year filing.

The company updated its segment allocation methodology for corporate overhead in February 2026 and revised prior-period amounts for comparability. This is a new disclosure not present in the baseline filing and affects how segment operating income is measured and reported.

Net sales grew 7.1% year-over-year in Q1 FY2027 ($175.7B vs. $164.0B), accelerating from 2.5% growth in Q1 FY2026. The acceleration was driven by strong comparable sales in U.S. segments, international market growth, and a $2.3 billion positive currency impact. eCommerce sales grew $8.5 billion or 26%, primarily from store and club-fulfilled delivery.

Walmart U.S. comparable sales increased 4.3% in Q1 FY2027, up from 3.1% in Q1 FY2026. The growth was driven by increases in both transactions and average ticket, with strength in grocery and general merchandise. eCommerce contributed approximately 5.2% to comparable sales, up from 3.4% in the prior year, reflecting stronger omnichannel engagement.

Sam's Club U.S. comparable sales increased 5.9% in Q1 FY2027, up from 2.8% in Q1 FY2026. Growth was driven by increases in transactions and unit volumes, with strength in grocery and general merchandise. Higher fuel sales contributed 2.1 percentage points to the increase, compared to a negative 2.6 percentage point impact in the prior year. eCommerce contributed approximately 3.1% to comparable sales.

Membership and other income increased $439 million or 27.0% to $2.1 billion in Q1 FY2027, compared to $1.6 billion in Q1 FY2026. The increase reflected 17.4% growth in membership fee revenue with strength across membership programs globally, plus certain miscellaneous income items. This is a significant acceleration from the 3.7% growth in the prior-year period.

Walmart incurred $0.2 billion in business reorganization charges in Q1 FY2027 within the Walmart U.S. segment and Corporate, related to strategic efforts to align global platforms. This is a new charge not present in the prior-year quarter, which instead lapped business restructuring charges from the year before. The current-year charges contributed to the 33 basis point increase in operating expenses as a percentage of net sales.

Operating income as a percentage of net sales decreased 8 basis points to 4.3% in Q1 FY2027 from 4.4% in Q1 FY2026. The compression was driven by a 33 basis point increase in operating expenses (higher depreciation, business reorganization charges, and associate healthcare costs), partially offset by a 6 basis point improvement in gross profit rate (merchandise mix shifts and higher-margin businesses like advertising).

Capital expenditures increased $1.7 billion or 34% to $6.7 billion in Q1 FY2027 from $5.0 billion in Q1 FY2026. The increase was driven by higher spending on supply chain, customer-facing initiatives, technology ($3.8B vs. $3.1B), store and club remodels ($1.6B vs. $1.2B), and new stores and clubs ($0.5B vs. $0.2B). This reflects accelerated investment in automation and omnichannel growth.

Free cash flow was negative $1.9 billion in Q1 FY2027, a decrease of $2.4 billion from positive $0.4 billion in Q1 FY2026. The decline was driven by a $1.7 billion increase in capital expenditures and a $0.7 billion decrease in net cash provided by operating activities (due to timing of inventory receipts). This is a significant deterioration in cash generation.

Share repurchases decreased to $2.1B in Q1 FY2027 from $4.6 billion in Q1 FY2026, a decline of $2.5 billion. The prior-year quarter had elevated repurchases driven by opportunistic pricing. The company approved a new $30 billion share repurchase program in February 2026, replacing the previous program, with $28.2 billion remaining as of April 30, 2026.

Walmart increased its annual dividend to $0.99 per share for fiscal 2027, up from $0.94 per share in fiscal 2026, representing a 5.3% increase. This is a slower pace of increase compared to the 13% increase in the prior year ($0.94 vs. $0.83). The dividend is paid in four quarterly installments of $0.2475 per share.

Sam's Club U.S. increased its annual membership fees effective May 1, 2026: Club memberships from $50 to $60 (20% increase) and Plus memberships from $110 to $120 (9% increase). This is the first disclosure of a membership fee increase. The benefit will be recognized ratably over future periods as fees are deferred and recognized over the one-year membership term.

ROI decreased to 14.9% for the trailing 12 months ended April 30, 2026, from 15.3% in the prior-year period. The decrease was primarily due to an increase in average invested capital from higher purchases of property and equipment. ROI benefited from increased operating income due to improved business performance, partially offset by non-cash share-based compensation charges at PhonePe and business reorganization charges.

Total long-term debt increased to $40.8 billion as of April 30, 2026, from $40.6 billion as of April 30, 2025. During Q1 FY2027, the company issued $4.2 billion in new long-term debt (net of deferred loan costs) and repaid $1.5 billion, resulting in a net increase of $2.6 billion. The company also renewed and extended its $15 billion committed credit facilities in April 2026, all undrawn.