Walmart stock dipped after Q1 2026 results early Thursday. The Dow Jones retailer maintained its full-year outlook and said consumers could see tariff-related price hikes later this month.
Walmart reported earnings of 61 cents per share adjusted, up a penny vs. a year earlier and beating FactSet expectations for 58 cents. Revenue increased 2.5% to $165.6 billion, a whisker below estimates.
CEO Doug McMillon called the quarter "solid" and said Walmart is "well positioned" to navigate the near-term environment.
Global e-commerce sales jumped 22% for the quarter. The company's global advertising business grew 50% for the period.
Comparable sales for Walmart U.S. rose 4.5% to outpace the 3.9% growth expected by analysts. Same-store sales for Sam's Club grew 6.7%. FactSet expected 4.5% growth.
Walmart U.S. revenue increased 3.2% to $112.2 billion, slightly below estimates for 3.6% growth.
Sam's Club revenue rose to $22.1 billion, while analysts expected $22.32 billion.
CFO John David Rainey in the release said that the dynamic backdrop makes it difficult to forecast near-term outcomes. The Dow Jones retailer opted to provide a range for its Q2 guidance, predicting net sales to rise 3.5%-4.5%.
Still, the company is confident it can achieve its full-year guidance, Rainey said. Walmart still sees fiscal 2026 EPS of $2.50-$2.60 vs. $2.51 a year earlier, with sales up 3%-4% from $674.5 billion last year. The midpoint of the outlook is below FactSet estimates for earnings of $2.60 per share on $704.99 billion in revenue.
Tariff Price Hikes Coming
Walmart should have at least a temporary reprieve from the worst of the proposed tariffs. The U.S. on Monday announced a trade deal on Monday that slashed tariffs on Chinese-made goods to 30% from 145% for 90 days while further negotiations take place.
President Donald Trump has altered or paused his "reciprocal" tariffs on various countries multiple times since the April 2 "Liberation Day" announcement. And a majority of the current tariff levels are not final as the U.S. is still negotiating with most of the world.
Still, CFO Rainey told CNBC that tariffs are "still too high" even with the recent rollbacks, saying it's "more than any retailer can absorb." He expects consumers to start seeing tariff-related price hikes later this month and "much more" in June.
The Wall Street Journal in late April reported that average prices for online products at Walmart, Target and Amazon were relatively flat since the start of that month, and were generally down from January. The three companies have also requested that suppliers step up to absorb more of the tariff costs. However, that approach still doesn't cover the full effect of the duties.
Executives from Walmart, Target and Home Depot met with Trump late last month and warned that price hikes would be difficult to avoid.
Trump's China Tariff Cuts Lift Shipping Stocks, But Uncertainty Remains
Analyst Views
DA Davidson analyst Michel Baker called the results "solid," adding they should help WMT stock continue its rebound since selling off last quarter. "Consumers remain discerning and maybe even concerned, but behaviors have not really changed, which we see in the continued share gains," Baker wrote in a post-earnings research note.
Brittany Quatrochi of Edward Jones in a note also called it a solid quarter amid tariff uncertainty and weakening consumer sentiment.
Quatrochi expects that Walmart should continue to gain market share as consumers seek value and convenience. Walmart's e-commerce business remains a strong sales driver and should be profitable for the full year, Quatrochi said. Meanwhile, Walmart is improving its value position with consumers via its membership and marketplace offerings, which are also bringing in higher-income customers.
"We believe Walmart is better positioned than many retailers to navigate this (tariff) uncertainty," Quatrochi wrote. "Longer-term, we view Walmart as among the fastest-growing companies within consumer staples."
Walmart Stock Rises Between Buy Points
Walmart stock pared its Thursday decline to 0.5% and closed at 96.35. Shares are trading above a 96.03 cup-with-handle buy point on a daily chart. Shares climbed above the entry on Wednesday with a 1% gain to 96.83.
On a weekly chart, the cup-with-handle buy point is 99.74.
Walmart stock is up more than 6% this year.
Rival Target rose 1.9% Thursday. TGT stock has tumbled more than 28% in 2025.
You can follow Harrison Miller for more stock news and updates on X/Twitter @IBD_Harrison
