Walmart Inc's WMT worse-than-expected earnings results left Jim Cramer stunned Tuesday morning.
What Happened: Walmart said first-quarter revenue increased 2.4% year-over-year to $141.6 billion, which beat the $138.88-billion estimate, according to data from Benzinga Pro. The company reported quarterly adjusted earnings of $1.30 per share, which missed the estimate of $1.48 per share.
Walmart also slashed its second-quarter earnings guidance from a low to mid single-digit range. The company now expects earnings to be "flat to up slightly."
Related Link: Walmart: Q1 Earnings Insights
Why It Matters: If Walmart's earnings are reflective of the real economy, the company's results could be signaling trouble ahead, but Cramer says the poor results are tied to Walmart's management.
"The execution here is so poor that it's embarrassing," Cramer said on CNBC. "This was a terrible quarter. Inventory is bad, sales are bad, execution terrible, really a sub-optimal situation."
On the other hand, Home Depot Inc HD reported better-than-expected financial results and raised guidance. The home improvement retailer's results prove Walmart's problems are specific to the company, he said.
"They executed very well. They're a great American retailer," Cramer said. "I don't know what's going on at Walmart. They should be doing some real soul-searching."
The "Mad Money" host remains puzzled by the company's excess inventory and overstaffing issues. He noted he still owns Walmart stock, although he reduced his exposure with the stock near its highs.
"Thanks heavens I sold some," Cramer said.
WMT Price Action: Walmart shares have traded between $132.01 and $160.77 over a 52-week period.
The stock was down 10.5% at $132.62 at press time.
Photo: courtesy of Walmart.
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