Walmart (WMT) delivered better-than-expected first-quarter results, fueled by strong U.S. same-store sales and a breakthrough in its e-commerce segment. Adjusted earnings reached $0.61 per share in Q1 FY26, surpassing the $0.58 estimate. Notably, the retail giant reported its first-ever profitable quarter in online sales across domestic and international markets.
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Walmart Falls Short on Top Line
In Q1, Walmart reported revenue of $165.6 billion, marking a 2.5% increase year-over-year but slightly below Wall Street expectations of $166.02 billion. Meanwhile, operating income grew by 4.3% on a reported basis.
Among its segments, Walmart U.S. same-store sales rose 4.5%, surpassing expectations, driven by strong performance in health and wellness and grocery categories.
However, the highlight of its results was its e-commerce. Walmart achieved its first-ever profitable quarter in e-commerce across both its U.S. and international operations. Meanwhile, online sales surged by 21% in the U.S. and 22% globally, marking the 12th consecutive quarter of double-digit growth. This strong performance was driven by higher-margin areas like digital advertising and its third-party marketplace.
Walmart Flags Q2 Concerns as Tariffs Loom
The company’s CFO, John David Rainey, cautioned that even with recent tariff reductions on Chinese imports, lowered to 30% for a 90-day period, the rates are still too high for Walmart and its suppliers. He anticipates consumers will start experiencing price hikes later this month, with a clearer effect expected in June.
Moreover, Walmart has withheld its EPS and operating income forecasts for Q2 because of ongoing tariff uncertainties. However, it expects Q2 net sales to grow between 3.5% and 4.5%. For the full year, the company reaffirmed its cautious guidance for fiscal 2026, expecting net sales to grow between 3% and 4%, consistent with its long-term goal of 4% annual sales growth set several years ago.
Is Walmart a Good Stock to Buy Right Now?
According to TipRanks, Wall Street has a Strong Buy consensus rating on WMT stock, based on 29 Buys and two Holds assigned in the last three months. The average Walmart stock price target of $108.71 implies 12.3% upside potential.
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