Walmart Q1 Earnings Beat Expectations Despite Profit Decline and Tariff Pressure
Walmart posted lower profits in the first quarter as Trump-era tariffs pushed up costs, forcing price hikes. Despite macroeconomic headwinds, the retail giant reported a quarterly profit of $4.45 billion
Walmart Inc (NYSE: WMT) first-quarter profit f ell as increased costs from tariffs implemented by President Donald Trump squeezed margins, prompting the retail giant to raise prices. Still, the company managed to beat analyst expectations on adjusted earnings per share.
The Bentonville, Arkansas-based retailer reported a quarterly profit of $4.45 billion, or 56 cents per share, for the period ending April 30, down from $5.10 billion, or 63 cents per share, a year ago. Adjusted earnings per share came in at 61 cents, topping the 58 cents projected by analysts surveyed by FactSet.
Revenue rose 2.5% year over year to $165.61 billion, narrowly missing estimates. Walmart’s U.S. comparable sales, which include established physical stores and online channels, grew by 4.5%, a slight deceleration from the previous quarter’s 4.6% gain and the 5.3% rise seen in Q3 2024.
"Many Americans have been pulling back on spending as they grow uneasy about the economy, and inflation remains elevated," the company noted. Tariffs on goods from China and other countries, introduced under Trump’s trade policies, have threatened Walmart’s hallmark low-price model.
Despite the pressure, CEO Doug McMillon remained optimistic. “We delivered a solid first quarter in a dynamic operating environment. We’re serving customers and members in more ways, which is fueling our growth. We’re well positioned, maintaining flexibility to navigate the near-term while continuing to invest to create value for the long-term,” McMillon said.
Key highlights from the quarter include:
• eCommerce growth of 22% globally
• Global advertising business up 50%, with Walmart Connect rising 31% in the U.S.
• Membership and other income rose 3.7%, including a 14.8% jump in membership income
• Operating income increased by $0.3 billion, up 4.3%, or 3.0% adjusted (constant currency), driven by higher gross margins and improved eCommerce economics
Shares of Walmart rose nearly 3% in pre-market trading Thursday following the results.
For the fiscal year 2025, Walmart expects net sales of $674.5 billion, adjusted operating income of $29.5 billion, and adjusted EPS of $2.51.
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