Walmart (WMT), the retail giant, is heading into the second quarter of fiscal 2027 with more than just a strong quarter hanging in the balance. Walmart has a reputation as one of the market’s most established dividend stocks. The company has raised its dividend for 53 consecutive years, placing it among the elite group of Dividend Kings. But a long dividend record is ultimately backed by the company’s ability to keep generating enough cash and profits to support it.
This is why the upcoming quarter is worth watching.
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The Dividend King Argument Comes Back to Business Strength
Walmart’s 53-year dividend track record is not completely at risk from one weak quarter. In fact, the company has already announced a 5% increase in its fiscal 2027 annual dividend, which will come to $0.99 per share. The quarterly dividend is $0.2475 per share, which is payable on Sept. 8. So the second quarter earnings will not decide whether Walmart will abandon its dividend or continue paying.
However, the upcoming Q2 print will reveal whether the underlying business continues to look strong enough to make the dividend policy sustainable over time. Currently, Walmart maintains a forward payout ratio of 35.2% and pays 0.86% in yield. While Walmart’s dividend is not big, it has earned its name because of its extraordinary ability to keep increasing its payout despite changing economic environments.
Q1 Gave Walmart a Strong Starting Point
In the first quarter of fiscal 2027, Walmart sales grew 7.3% to $177.8 billion. Adjusted operating income grew roughly 5% in constant currency, despite higher-than-anticipated fuel costs of $175 million in its global distribution and fulfillment operations. Walmart U.S. comparable sales increased 4.1%, with enterprise eCommerce sales up 26%. Beyond traditional retail sales, Walmart’s advertising business also grew 37% globally, with the U.S. advertising business up 36% alone. Consolidated membership fee revenue increased more than 17%, while Walmart+ membership fee growth accelerated and net additions reached a new Q1 high.
Management highlighted advertising, membership, and marketplace as increasingly important sources of profitability. For investors, that suggests Walmart’s growth strategy is extending beyond simply selling more products and is increasingly focused on building higher-value revenue streams around its core retail business. The second quarter will reveal whether the company is making headway on the profitability improvement that management outlined during the Q1 earnings call.
