Walmart (NASDAQ: WMT) has seen its stock price fall sharply following the release of its fiscal first-quarter 2027 earnings report.
From May 20 to May 29, Walmart’s stock dropped 11.5% as investors reacted to the company’s unchanged guidance for the fiscal year.
Retailers broadly are navigating a difficult environment marked by cautious consumers, sticky inflation, and elevated fuel costs.
Among Walmart, Costco Wholesale, and Target, investors appear most concerned about Walmart based on stock price movement following recent earnings reports.
Despite the turbulence, Walmart’s earnings call highlighted a growing revenue stream that may be easy to overlook in the current environment.
Walmart launched its Walmart+ subscription service in 2020, offering perks such as gas savings, free delivery, and early-access deals, among other benefits.
Unlike Costco’s model, customers do not need a membership to shop at a Walmart store, but the numbers show subscribers engage far more heavily with the retailer.
Management shared during the first-quarter earnings call that Walmart+ members generally spend four times more than nonmembers across the retailer’s channels.
Those same members visit Walmart websites seven times more than nonmembers throughout the year, underlining the loyalty effect of the subscription program.
Walmart reported that revenue from its subscription service for the quarter ended April 30 rose by double digits, signaling strong momentum for the program.
As of February, it was estimated that there were 28.4 million Walmart+ members enrolled in the service.
Higher fuel prices were mentioned several times in Walmart’s earnings report, representing a challenge the company will need to continue navigating going forward.
The retailer is also generating more revenue from advertising and online sales, broadening its base of income beyond traditional in-store retail.
Walmart’s subscription strategy functions as a built-in loyalty mechanism, since members are more motivated to shop frequently in order to get value from their membership fees.
The short-term outlook remains cautious given the unchanged fiscal guidance, but the long-term picture is supported by a growing member base and expanding revenue generators.
