Walmart Inc. (NYSE: WMT) – Q1 FY2026 Earnings Analysis

 

Walmart Inc. (NYSE: WMT) – Q1 FY2026 Earnings Analysis

● Analysis Background

On May 15, 2025, Walmart Inc. reported its financial results for the first quarter of fiscal year 2026, covering the period ending April 30, 2025. This report provides a detailed analysis of the company's performance, strategic initiatives, and investment considerations based on the latest data.

● Company Overview

Walmart Inc. is a leading global retailer headquartered in Bentonville, Arkansas. Operating over 10,500 stores worldwide, Walmart serves millions of customers through its physical locations and e-commerce platforms. The company offers a wide range of products, including groceries, apparel, electronics, and home goods, under various formats such as Walmart U.S., Walmart International, and Sam's Club.

● Business Segments and Performance Structure

• Walmart U.S.: The largest segment, contributing significantly to total revenue, with strong performance in grocery and health & wellness categories.
• Walmart International: Operations across multiple countries, with notable growth in Mexico and Chile.
• Sam's Club: Membership-based warehouse clubs offering bulk products and services, showing steady growth in membership income.

● Financial Summary as of May 15, 2025

Metric	Q1 FY2026	Q1 FY2025	Year-over-Year Change
Total Revenue	$165.6B	$160.3B	+3.3%
Net Income	$7.3B	$7.1B	+2.8%
Earnings Per Share (EPS)	$0.61	$0.58	+5.2%
Operating Income	$6.5B	$6.3B	+3.2%
Operating Margin	3.9%	3.9%	—
Free Cash Flow	$3.2B	$3.0B	+6.7%
Guidance for Next Quarter	Revenue: $168B–$170B; EPS: $0.62–$0.65	—	—

● Key Issues and Strategies

• Tariff Impact: Walmart faces increased costs due to new tariffs on imports from China and Latin America. The company plans to raise prices on certain goods to offset these expenses, while also absorbing some costs to remain competitive.
• Membership Growth: Walmart+ membership income grew nearly 15%, indicating strong customer engagement and loyalty.
• Supply Chain Resilience: With two-thirds of U.S. products sourced domestically, Walmart is better positioned to handle international trade disruptions.

● Investment Considerations

Strengths

• Robust revenue growth driven by core U.S. operations and e-commerce expansion.
• Strong membership program contributing to recurring revenue streams.
• Resilient supply chain with a focus on domestic sourcing.

Risks

• Potential consumer pushback due to price increases from tariff-related cost pressures.
• Exposure to international trade policies and geopolitical tensions affecting import costs.
• Competitive pressures from other retailers and e-commerce platforms.

● Conclusion and Evaluation

Walmart's Q1 FY2026 results demonstrate solid performance amid challenging economic conditions. The company's strategic initiatives, including membership growth and supply chain resilience, position it well for continued success. However, investors should monitor the impact of tariff-related cost pressures and competitive dynamics in the retail sector.

Next Earnings Release Expected: August 15, 2025