EPS of $0.56 decreased by 11.1% from previous year
Gross margin of 24.9%
Net income of 4.49B
""We feel great about how we're driving eCommerce growth in a way that not only serves customers and members better, but reshapes our business model..." - Doug McMillon" - Doug McMillon
In Q1 2026, Walmart Inc. reported robust financial performance with a revenue increase of 4% year-over-year, attributed largely to a significant 22% growth in eCommerce sales. Operating income also rose to $7.1 billion, giving an operating margin of 4.3%. The company's strategic focus on enhancing operational efficiencies, especially in eCommerce and delivery speed, is designed to counteract the challenges posed by tariffs and inflation. Management expressed confidence in navigating these cost pressures while still aiming to grow profits faster than sales. Strong inventory management practices were highlighted, which are essential as Walmart adapts to the dynamic consumer landscape and fluctuating costs of goods.
Key Performance Indicators
Revenue
165.61B
QoQ: -8.28% | YoY:2.54%
Gross Profit
41.31B
24.94% margin
QoQ: -6.93% | YoY:3.07%
Operating Income
7.14B
QoQ: -9.21% | YoY:4.30%
Net Income
4.49B
QoQ: -14.60% | YoY:-12.09%
EPS
0.56
QoQ: -13.85% | YoY:-11.11%
Revenue Trend
Margin Analysis
Key Insights
Total Revenue: $165.6 billion, up 4% YoY;
Net Income: $4.487 billion, down 12.1% YoY;
Operating Income: $7.135 billion, up 4.3% YoY.
Gross Profit Margin: 24.9%;
Operating Margin: 4.3%.
Financial Highlights
Revenue and Profitability:
- Total Revenue: $165.6 billion, up 4% YoY;
- Net Income: $4.487 billion, down 12.1% YoY;
- Operating Income: $7.135 billion, up 4.3% YoY.
Market Performance:
- Q1 Comp sales for Walmart U.S.: 4.5%; Sam’s Club U.S.: 6.7% (ex-fuel).
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
165.61B
2.54%
-8.28%
Gross Profit
41.31B
3.07%
-6.93%
Operating Income
7.14B
4.30%
-9.21%
Net Income
4.49B
-12.09%
-14.60%
EPS
0.56
-11.11%
-13.85%
Key Financial Ratios
Net Income vs. Revenue
Expense Breakdown
Management Commentary
Ecommerce and Growth:
Doug McMillon emphasized, "Globally, we grew eCommerce 22% with each segment delivering growth of at least 20%... There’s a lot to like about how we're changing and where we are."
Inventory Management:
John David Rainey noted, "Importantly, our inventory is at a healthy level, up 3.8%. That's obviously as important as ever as we head into a tariff-impacted period where cost pressures will impact item pricing..."
Profitability Assurance:
McMillon stated, "We’re committed to growing profit faster than sales... Our strategy and omnichannel capabilities are strong."
Tariff Navigation Strategy:
He also highlighted the need for judicious procurement amidst tariffs: "The immediate challenge is obviously navigating the impact of tariffs here in the U.S..."
"We feel great about how we're driving eCommerce growth in a way that not only serves customers and members better, but reshapes our business model..." - Doug McMillon
— Doug McMillon
"We expect this period to be no different. We'll play offense and may opportunistically invest in areas to improve our value proposition..." - John David Rainey},
— John David Rainey
Forward Guidance
Walmart's management signaled continued confidence in achieving full-year sales growth of 4% despite tariff pressures, emphasizing that potential reductions in tariffs could enhance profitability. They noted, "The range of possible outcomes is much greater than when we originally provided our annual guidance," reflecting on the uncertainties tied to changing policies. Expectations for Q2 sales growth were projected in the range of 3.5% to 4.5%, acknowledging the fluid impact of tariffs on price elasticity and consumer behavior.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
WMT Focus
24.94%
N/A
N/A
N/A
COST
12.90%
3.53%
7.35%
59.32%
DLTR
30.80%
5.51%
4.10%
21.91%
BJ
18.80%
3.95%
7.60%
25.78%
BIG
33.70%
-12.30%
-2.52%
-12.80%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Walmart's strong quarterly performance reflects its resilience and adaptability in the face of cost pressures. The company's strategy to grow eCommerce and diversify revenue streams through membership and advertising presents a favorable long-term outlook. However, investors need to monitor the ongoing impact of tariffs and inflation on profit margins closely. With a solid cash position and proactive inventory and cost management strategies, Walmart remains a compelling investment opportunity, although market conditions may induce short-term volatility.
Key Investment Factors
Growth Potential
Walmart's commitment to expand its eCommerce offerings, including enhanced delivery options and a growing marketplace, positions it well for sustained revenue growth.
Profitability Risk
Ongoing tariff costs are a significant risk, potentially squeezing margins. The volatility in consumer spending patterns due to economic pressures could also impact sales.
Financial Position
Walmart maintains a strong balance sheet with adequate liquidity ($9.932 billion in cash) to navigate short-term challenges and invest in growth opportunities.
SWOT Analysis
Strengths
Strong brand recognition and market leadership in discount retailing
Diverse product offerings with a growing eCommerce segment
Well-managed inventory that adapts to changing market conditions
Weaknesses
Exposure to tariffs which may impact pricing strategies
Dependence on U.S. market for a significant portion of revenue
Lower profit margins compared to some peers
Opportunities
Expanding eCommerce capabilities and delivery services
Growth in the advertising and membership revenue segments
Strategic partnerships and acquisition opportunities in technology and logistics
Threats
Economic downturns affecting consumer spending
Intense competition from both traditional retailers and eCommerce platforms
Regulatory changes impacting trade agreements and tariffs