Walmart reports Q1 results

Walmart announced first-quarter results with steady growth in revenue and operating income. 

Globally, eCommerce grew 22% with digital mix up across all segments. Walmart U.S. comp sales were up 4.5% with strong growth in health & wellness and grocery.

“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,” said Doug McMillon president and CEO, Walmart.

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First Quarter Highlights: 

• Revenue of $165.6 billion, up 2.5%, or 4% (cc); includes ~100 bps headwind from lapping leap day
• Global eCommerce sales grew 22%, led by store fulfilled pickup & delivery and marketplace
• Global advertising business grew 50%, including VIZIO; Walmart Connect in the U.S. up 31%
• Membership and other income up 3.7%, including 14.8% growth in membership income
• Gross margin rate up 12 bps, led by Walmart U.S.
• Operating income up $.3 billion, or 4.3%, adjusted up 3.0% (cc) due to higher gross margins and growth in membership income; also benefited from improved economics in eCommerce; includes ~250 bps headwind from lapping leap day
• Adjusted EPS of 61 cents excludes the effect, net of tax, of a net loss of 5 cents on equity and other investments 

Walmart U.S.:

•  Sales strength led by health & wellness and grocery; seasonal events were strong; grocery share gains continued
• Comp sales momentum reflects higher transaction counts and unit volumes; strong growth in eCommerce
• eCommerce sales up 21% reflects strength in store-fulfilled pickup & delivery, advertising and marketplace; expedited delivery channels continue to resonate with customers desiring convenience
• Strong growth in advertising, including a 31% increase in Walmart Connect sales (ex-VIZIO)
• Gross profit rate increased 25 bps; membership income up double-digits; operating expense deleveraged 8 bps
• Operating income up 7% due in part to improved eCommerce economics, aided by improved business mix
• Inventory increased 4.5% while maintaining healthy in-stock levels; inventory about flat on a two-year stacked basis

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Walmart International: 

• Growth in net sales (cc) led by China, Flipkart and Walmex; transaction counts & unit volumes up
• Growth in general merchandise and continued strength in food and consumables
• eCommerce sales up 20%, led by store-fulfilled pickup & delivery and marketplace; digital mix up across markets
• Advertising business grew 20%, led by Flipkart
• Operating income (cc) decline affected by strategic growth investments for Flipkart, Walmex and Canada
• Currency rate fluctuations negatively affected sales by $2.4 billion and operating income by $.2 billion

Sam’s Club U.S.:

• Sales strength led by grocery and health & wellness; fourth consecutive quarter of positive general merchandise sales
• Comp sales growth driven by increases in transactions and unit volumes
• eCommerce sales up 27%, including delivery growth of ~160%
• Membership income grew 9.6% with steady growth in member counts, renewal rates, and Plus members
• Operating income growth driven by continued momentum throughout the business

Looking ahead, the company issued guidance for the second quarter with net sales expected to increase 3.5% to 4.5% in constant currency. The company’s outlook for fiscal year 2026 remains unchanged from prior guidance.

“Given the dynamic nature of the backdrop, and the range of near-term outcomes being exceedingly wide and difficult to predict, we felt it best to hold from providing a specific range of guidance for operating income growth and EPS for the second quarter. With a longer view into the full year, we believe we can navigate well and achieve our full year guidance,” said John David Rainey, Walmart executive vice president and chief financial officer.