Walmart stock drops 8% after earnings beat revenue forecast

Walmart Inc. shares have declined following the company's first-quarter earnings report, despite posting revenue that exceeded analyst expectations. The stock fell approximately 8% after the results were released, trading around $118.57 on Wednesday, down significantly from its 12-month high of $135.15.

For the quarter ended in May, the retail giant reported revenue of $177.75 billion, a 7.4% increase year-over-year and above the consensus estimate of $174.84 billion. Earnings per share were $0.66, matching forecasts. The company's global e-commerce sales grew 26%, and it raised its full-year net sales guidance to the high end of its previously forecasted 3.5% to 4.5% growth range.

However, management highlighted approximately $1 billion in incremental freight and fuel expenses, which pressured profitability. The company's operating income grew 5.0%, but executives noted that higher fuel costs reduced this figure by about $175 million. The full-year operating profit growth guidance of 6% to 8% was seen by some analysts as below elevated expectations.

Several financial firms have adjusted their price targets for Walmart in response. Bank of America maintained a Buy rating but...