Walmart Inc. reported mixed first-quarter earnings on Thursday, highlighting the ongoing challenges posed by President Trump’s tariff policies. The retail giant posted revenue growth of 2.5% to $165.6 billion, slightly below Wall Street expectations of $166.02 billion. Adjusted earnings per share rose 1.7% year-over-year to $0.61, beating the forecast of $0.58. Same-store sales in the U.S. also exceeded expectations, increasing by 4.5%, with healthcare and grocery segments showing the strongest performance.
Despite these positive metrics, Walmart’s stock dipped slightly following the earnings release, as the company signaled continued cost pressures ahead.
CEO Doug McMillon noted in a press release that the company is committed to keeping prices as low as possible but acknowledged the difficulty given the scale of tariffs. “Even with announced tariff reductions this week, considering the thin retail margins, we cannot absorb all the pressure,” he said during the earnings call. McMillon added that tariffs have already led to price increases in April and May.
Robert Ohmes from Bank of America estimated that about 15% of Walmart’s U.S. sales come from China. Approximately 60% of sales relate to groceries, many of which are produced domestically or in Mexico and Canada, exempting them from tariffs.
McMillon also pointed out that tariffs on countries such as Costa Rica, Peru, and Colombia are impacting imports like bananas, avocados, coffee, and roses. He emphasized the company’s efforts to keep food prices low and expressed hope for favorable policy changes.
Walmart’s adjusted operating income grew 2.8% in the quarter, surpassing its previous guidance range of 0.5% to 2%, which the company had lowered last month. Earlier this year, Walmart had projected adjusted annual operating income growth between 3.5% and 5.5%.
Looking ahead, Walmart expects second-quarter net sales to rise between 3.5% and 4.5%. However, the company refrained from providing adjusted earnings or operating income guidance due to the unpredictable and dynamic market environment.
For the full fiscal year 2026, Walmart reaffirmed its conservative outlook, anticipating net sales growth of 3% to 4%, consistent with its long-term annual growth target of 4%.
Joe Feldman of Telsey Advisory Group commented in a client note that Walmart is expected to withstand cost pressures better than most companies in the sector.
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