TL/DR –
Walmart’s US comparable-store sales excluding fuel rose by 4.1% in Q1 of fiscal year 2027, driven by strong growth in grocery and general merchandise. Mid-single-digit comps growth in the grocery category was led by fresh and pantry items, but comps were impacted by changes in how the federal government pays for certain drugs, which resulted in a 100-basis-point hit related to legislation tied to the Inflation Reduction Act. The company also recorded strong transaction growth stateside and e-commerce sales growth, with strategies including price investments, speedy delivery, and customer engagement within membership programs.
Walmart US Sees Sales Growth Amid Economic Challenges
Walmart’s U.S. comparable-store sales, excluding fuel, experienced a significant rise of 4.1% in the first quarter of the fiscal year 2027. This was largely attributed to strong performance in grocery and general merchandise sectors. Additionally, the grocery category of Walmart U.S. marked a mid-single-digit comps growth in the first quarter, with fresh and pantry items leading the way.
However, the growth was somewhat restrained due to recent alterations in how the federal government handles payments for certain medications. This challenge has also affected financial results for other retailers. In connection with legislation linked to the Inflation Reduction Act, Walmart’s first quarter comps were hit with a 100 basis points, as explained by CFO John David Rainey during the Thursday morning earnings call.
Walmart’s Thriving Transactions and E-commerce
Over the past six quarters, Walmart has reportedly seen the strongest transaction growth domestically. This was coupled with robust growth in e-commerce sales, as stated by President and CEO John Furner. Furner emphasized Walmart’s commitment to price investments as a means to alleviate the ongoing financial pressure felt by consumers. As part of this strategy, the retailer extended the temporary price cuts implemented last year and currently has 7,200 reductions in place.
To offer value, Walmart has also introduced a basket of grilling essentials that can feed eight people for less than $5 per person, aligning with the industry trend of consumers seeking value, particularly in food. Alongside these price interventions, Walmart is also leveraging its speedy delivery capability to meet consumer demands, reaching around 60% of the U.S. population in 30 minutes or less. Nearly a third of store-fulfilled orders in the first quarter were delivered in under three hours.
Focus on Membership Programs and E-commerce Operations
According to Furner, the ability to deliver within customer expected time frames has led to greater customer engagement and improved the utility of Walmart’s membership programs. Further, Walmart’s U.S. e-commerce operations saw an impressive 26% sales growth in Q1, mirroring the growth rate recorded in the previous quarter. The CEO has highlighted that approximately half of Walmart’s U.S. e-commerce fulfillment center volume is automated, and more than half of regional distribution centers are undergoing retrofitting.
Walmart and Economic Strains
Despite recent spikes in fuel costs, Walmart executives reiterated the full-year guidance provided earlier in February. While they expressed confidence in the company’s ability to withstand economic strains due to its diverse operations and strong customer proposition, Rainey acknowledged the company’s vulnerability to economic occurrences. In connection with the ongoing Strait of Hormuz crisis, Rainey warned that persisting high fuel prices could increase pressure on average unit retail prices. Plus, restrictions on the passage of fertilizer, nitrogen, and phosphates could have adverse effects on the food and agriculture sector.
Rainey noted that while their everyday low price approach is central to their identity, the persisting high-cost environment could lead to higher retail price inflation in the second quarter and the latter half of the year.
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