On Thursday, Walmart, the largest retailer in the United States, announced its latest financial report. Despite quarterly earnings exceeding expectations, sales were slightly lower than estimated, causing the stock price to drop by over 4% in early trading. The company acknowledged facing cost pressures due to tariffs, which may lead to an increase in consumer goods prices starting at the end of this month.
Based in Arkansas, Walmart surpassed market expectations for earnings and reiterated its unchanged full-year financial forecast, expecting sales to grow by 3% to 4% with earnings per share ranging between $2.50 to $2.60. The company also achieved a milestone this quarter with its e-commerce division profitability in the U.S. and globally synchronized for the first time, largely benefiting from high-profit businesses such as advertising and third-party platforms. U.S. e-commerce sales increased by 21% year-on-year, marking 12 consecutive quarters of double-digit growth.
Chief Financial Officer John David Rainey stated that despite the recent agreement between the U.S. and China to temporarily reduce Chinese tariffs to 30% within 90 days, “overall tariffs remain relatively high,” making it difficult for retailers and suppliers to absorb costs entirely. He warned that the price hike effect will start reflecting by the end of May, with more pronounced effects in June.
Rainey mentioned that performance in February was below expectations, March met expectations, April was “quite strong,” and the trend continued into early May. Consumer behavior overall has not changed significantly, with consumers still seeking value for their purchases.
Net profit for the quarter was $4.49 billion, a decrease from the same period last year; revenue increased by 2.5% compared to last year but fell short of expectations, marking the first miss since 2020. U.S. same-store sales grew by 4.5%, while Sam’s Club sales increased by 6.7%.
CEO Doug McMillon added that imported goods from China, such as toys and electronics, remain the largest source of cost pressure, with tariffs from countries like Costa Rica and Peru also pushing up prices of items like bananas and coffee.
Despite facing pressures, Walmart has maintained price stability for certain products. For example, during Mother’s Day, Sam’s Club flower prices remained unchanged. The company has not canceled orders but has reduced some purchase quantities and adjusted strategies to meet changing demand.
With stable demand for food and daily necessities, coupled with the growth of advertising and subscription service Walmart+, Walmart continues to hold an advantage during economic uncertainty. The Walmart Connect advertising platform saw a 31% increase in sales this quarter.
As of the closing on Wednesday, Walmart’s stock price has risen by about 7% since the beginning of the year, outperforming the S&P 500 index during the same period, with a market value of $775 billion.