On Thursday, Walmart’s quarterly earnings and revenue exceeded expectations. The largest retailer in the United States made significant progress in e-commerce, with new businesses such as advertising driving profit growth and attracting more high-income customers.
Walmart announced that it expects full-year performance to meet or slightly exceed previous expectations. Its first-quarter revenue for the 2025 fiscal year was $161.51 billion, higher than the expected $159.58 billion, with adjusted earnings per share also higher at $0.60, compared to the expected $0.53.
For the entire 2025 fiscal year, the company expects net sales to increase by 3% to 4% and operating income to grow by 4% to 6%.
Chief Financial Officer John David Rainey, in an interview with CNBC, mentioned that shoppers appreciate the convenience Walmart provides. Rainey stated that the delivery business has surpassed in-store pickup in terms of volume for the first time.
“Our customers are visiting us more frequently than before, and we have new customers that traditionally didn’t shop at Walmart,” Rainey said, “whether it’s through our online virtual store or our physical locations.”
According to a survey by the London Stock Exchange Group (LSEG) among analysts, Walmart’s first-quarter performance compared to Wall Street expectations stood as follows:
Revenue: $161.51 billion vs. $159.5 billion
Adjusted earnings per share: $0.60 vs. $0.52
Overall U.S. same-store sales growth: 3.9% vs. 3.42%
Walmart U.S. same-store sales growth: 3.8% vs. 3.45%
Traffic: 3.8% vs. 3.17%
Sam’s Club U.S. same-store sales growth rate: 4.4% vs. 3.3%
Walmart U.S. e-commerce growth rate: 22% vs. 13.33%
As the largest retailer and private employer in the U.S., Walmart is often seen as a barometer of the American economy. During times of inflation, it tends to perform better overall compared to other retailers as it sells essential groceries and focuses on value.
In an effort to appeal to younger and wealthier households amidst changing consumer preferences, Walmart recently introduced a new private label grocery brand called bettergoods, offering higher quality and more stylish products. The company is also upgrading and modernizing over 1,400 of its stores across the U.S., introducing some refreshed, more fashionable brands such as Love & Sports.
Simultaneously, amidst inflation, the company has increased its “Rollback” efforts by reducing prices on specific items. Rainey mentioned, “Even low-income consumers seem to be holding up well. General merchandise categories also saw year-over-year sales growth.”
Walmart has expanded its focus beyond retail to increase profits and compete against rivals like Amazon.
New businesses such as advertising and the subscription-based membership program Walmart+ contributed to profit growth this quarter and drove operating income growth more than sales growth. This quarter, the company’s global advertising business grew by 24%, with the U.S. advertising business growing by 26%.
Third-party marketplaces have been a significant driver of the company’s business. Similar to Amazon, Walmart expands its online business by welcoming sellers onto its website and earns additional revenue by providing these sellers with advertising and fulfillment services.
During an earnings call, McMillon mentioned that in the U.S., the number of marketplace sellers increased by 36% this quarter, with over 420 different types of products being sold on the platform. In Mexico, the number of marketplace sellers increased by over 50%, with the total number of products increasing by nearly 80%.
Rainey told CNBC that one-third of Walmart’s year-over-year operating income growth came from these new businesses.
Walmart has been cutting expenses in certain areas while investing heavily in others. Earlier this week, the company announced the layoff and relocation of hundreds of corporate employees, with many being transferred to its headquarters in Bentonville, Arkansas. Prior to this, the retailer closed Walmart Health Clinics, on-site doctor and dental offices adjacent to its stores.
Walmart is the largest employer in the U.S., with 1.6 million American employees.
Rainey stated that the purpose of relocating employees is to move away from remote work, not to cut costs.
“We strongly feel the benefits of collaboration,” he said. “One of our competitive advantages is our culture – it is nurtured through unity.”
On the other hand, the retail giant has been diverting funds into other areas. In a bid to chase advertising revenue, Walmart announced in February its acquisition of smart TV manufacturer Vizio for $23 billion.
Walmart’s stock closed at $59.83 on Wednesday, pushing its market value to $482.2 billion. As of Wednesday’s close, the company’s stock has risen nearly 14% year-to-date, outperforming the approximately 11% increase of the S&P 500 index during the same period.