Walmart’s Digital Sales Contribute to Profitability in Q1
Walmart Inc. has released its first-quarter results, which show steady growth in revenue and operating income. Revenue was up 2.5%, at $165.6 billion, while operating income rose 4.3%.
Walmart U.S. comp sales (excluding fuel) were up 4.5%, with strong growth in grocery and health and wellness. Grocery private-brand penetration was up 60 basis points versus last year.
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Sam's Club U.S. comp sales, excluding fuel, increased 6.7%, with strong growth in transactions, including strength in the Member’s Mark brand.
The company grew international sales by 7.8%. Global membership fee income rose 14.8%. Transactions and units drove the top line.
Walmart’s Q1 results surpassed market expectations, with an earnings per share (EPS) of 61 cents against a forecast of 58 cents.
Moreover, the value and convenience of the company’s omnichannel strategy resonated with customers and members. Global e-commerce grew 22% in the quarter, led by store-fulfilled pickup and delivery and marketplace.
Walmart U.S.’s comp sales gains reflect strong e-commerce growth. The division achieved e-commerce profitability in Q1 for the first time, growing 21%. Delivery speed continued to help drive business, with same-day delivery expansion on track to reach 95% of U.S. households by the end of FY 2026.
E-commerce sales for Sam’s Club were up 27%. More than 50% of members now transact digitally in some form with Sam’s Club.
Guidance & Tariff Talk
Looking ahead, the company issued guidance for the second quarter, expecting net sales to increase 3.5% to 4.5%. The company’s outlook for fiscal year 2026 remains unchanged from its prior guidance.
“Given the dynamic nature of the backdrop, and the range of near-term outcomes being exceedingly wide and difficult to predict, we felt it best to hold from providing a specific range of guidance for Q2 operating income growth and EPS. With a longer view into the full year, we believe we can navigate well and achieve our full-year guidance," said John David Rainey, Walmart’s EVP and CFO.
During the company’s earnings call, Walmart executives went into more detail about tariff uncertainty.
“We won’t let tariff-related cost pressure on some general merchandise items put pressure on food prices,” said CEO Doug McMillon, “but as it relates to food, tariffs on countries like Costa Rica, Peru and Colombia are pressuring imported items like bananas, avocados, coffee and roses. We’ll do our best to control what we can control in order to keep food prices as low as possible.”
While the Trump administration said this week that it will temporarily lower its overall tariffs on Chinese goods from 145% to 30%, McMillon noted that even at reduced levels, “we aren’t able to absorb all the pressure, given the reality of narrow retail margins. In retail, managing inventory is always important. ... It’s helpful that we’re entering the second quarter with well-managed inventory.”
“Should more progress on trade in the next several weeks be favorable, there could be upside," said Rainey. "If elevated tariffs remain in place for an elongated period, there would be downside risk. We will know a lot more in a couple months, but we are equipped to manage this as well [as] or better than other retailers.”
While the company is well positioned to manage the cost pressure from tariffs, McMillon warned that higher tariffs will likely result in higher prices.
However, it's advantageous to the company that more than two-thirds of what it sells in the United States is made, assembled or grown here. Walmart recently revealed additional support for U.S. businesses in the form of the Grow With US initiative, which provides small American businesses with the education, training and resources they need to work with the national retailer.
Each week, approximately 270 million customers and members visit Walmart’s more than 10,750 stores and numerous e-commerce websites in 19 countries. With FY2025 revenue of $681 billion, the company employs approximately 2.1 million associates worldwide. Bentonville, Ark.-based Walmart U.S. is No. 1 on Progressive Grocer’s 2024 list of the top food and consumables retailers in North America
