How Did Walmart Stack Up on the Top and Bottom Line?
Adjusted earnings came in at $0.61 per share, ahead of the $0.58 forecast. Revenue totaled $165.61 billion, narrowly missing the $165.84 billion estimate. Comparable U.S. store sales climbed 4.5%, with Sam’s Club up 6.7%, excluding fuel. Revenue rose 2.5% year over year, though comparisons were tempered by the leap year effect.
Net income dropped to $4.49 billion, or $0.56 per share, from $5.10 billion, or $0.63 per share, a year ago. Still, Walmart’s ability to maintain profitability in a cost-sensitive environment underscores its pricing power and operational discipline.
Is E-Commerce Finally Paying Off for Walmart?
Walmart logged its first profitable quarter in e-commerce across both U.S. and international markets. Online sales jumped 21% in the U.S. and 22% globally, extending a 12-quarter streak of double-digit growth. Higher-margin segments such as online advertising and its third-party marketplace were key contributors.
Walmart Connect, the U.S. advertising arm, posted a 31% year-over-year sales gain, excluding the Vizio acquisition. Membership-based services like Walmart+ and improved logistics have further boosted engagement from middle- and high-income shoppers.
What Role Will Tariffs Play in Q2 and Beyond?
CFO John David Rainey warned that recent tariff cuts on Chinese imports, down to 30% for 90 days, remain too steep for the company or its suppliers to fully absorb. He expects consumers to begin seeing price increases later this month, with a more noticeable impact in June. Due to tariff uncertainty, Walmart withheld EPS and operating income guidance for the second quarter, though it projects 3.5% to 4.5% growth in net sales.
What Should Traders Expect Next?
Walmart’s strong quarter sets the tone ahead of key updates from Target, Home Depot, and Lowe’s next week. The stock, up 7% year to date, continues to outperform the S&P 500, reflecting investor confidence in Walmart’s defensive mix of essentials and expanding digital revenue streams. Tariff developments remain a risk factor, but Walmart’s scale and pricing leverage offer a cushion in a tight consumer environment.
