By Nathalie Voit

Walmart released its financial results for the first quarter on May 17, sending shares of the stock tumbling more than 11% on Tuesday.

The discounter reported adjusted earnings per share of $1.30 for the three months ending April 30, 18 cents lower than the Refinitiv consensus estimate. Net income for the quarter dropped to $2.05 billion, or 74 cents per share, compared with $2.73 billion, or 97 cents per share last year.

Total revenue exceeded Wall Street expectations of $138.94 billion to hit $141.57 billion for the 13-week period ending April 30, up from $138.31 billion one year ago.

Same-store sales in the U.S. grew 3% year-over-year and 9% on a two-year basis. Walmart’s e-commerce division reported sales growth of 1% or 38% over two years. Sam’s Club, the company’s membership-only warehouse business, saw 10.2% growth from the same quarter one year ago and 17.4% growth on a two-year stack. Membership income rose 10.5%, Walmart said in the release.

The retail giant also provided updated guidance for Q2 and the rest of the year. Walmart upwardly revised its sales outlook for fiscal 2023, saying it projects net sales to rise around 4% in constant currency for the full year. Walmart previously anticipated an increase of about 3% in last quarter’s earnings report.

However, the company also lowered its profit expectations in the updated outlook, predicting earnings per share for fiscal 2023 to decrease about 1% from the prior year. The company had previously projected an increase in the mid-single digits in guidance released on Feb. 17.

“Bottomline results were unexpected and reflect the unusual environment,” President and CEO of Walmart Doug McMillon said in the Q1 2023 earnings release. “U.S. inflation levels, particularly in food and fuel, created more pressure on margin mix and operating costs than we expected. We’re adjusting and will balance the needs of our customers for value with the need to deliver profit growth for our future.”

Inflation in the U.S. is near a 40-year high, according to consumer price data from the Labor Department.

Shares of the company tumbled to a new 52-week low on May 18 following Tuesday’s report. Walmart stock closed at $122.43 a share on Wednesday, down almost 7%.