Walmart quarterly net income up almost 19%, revenue rises 7.3%

Walmart on Thursday (May 21) turned in a solid fiscal first quarter, topping consensus estimates on top and bottom lines. Net income was $5.33 billion, up 18.8% compared with the same period in 2025. Quarterly revenue totaled $177.75 billion, up 7.3% from a year ago.

The adjusted earnings per share was 66 cents. Adjustments were from one-time charges for corporate streamlining expenses and unrealized gains and losses from equity investments. Adjusted earnings rose by 8% as analysts expected.

Net operating income grew 5%, which was in line with guidance. Walmart said operating income was offset by $175 million in higher-than-expected fuel costs, which were absorbed during the quarter from the company’s global distribution and fulfillment operations. The Trump Administration’s war with Iran has resulted in significantly higher global energy prices.

Despite the financial results, a cautious commentary from Walmart executives and slightly lower earnings guidance sent Walmart’s stock price down more than 7% in early trading on Thursday.

“We will continue to play offense despite short-term pressure on profits,” said Chief Financial Officer John David Rainey. “We are confident that this is the approach to reinforce customer trust and support share gains over the long term. We will seek tariff refunds and expect to reinvest those proceeds back into price to support our customers.”

Revenue growth was fueled in part by gains of 26% in global e-commerce sales and 37% growth in Walmart’s global advertising business. Membership income rose 17% in the quarter, led by Walmart U.S.

While Walmart executives were upbeat on the company’s ability to generate sales and operating income, but there was a cautious tone about fuel costs. Rainey said higher fuel costs are negatively impacting consumers, noting that the number of gallons of gasoline purchased per trip has fallen below 10, which is a symptom of consumer stress. Like-for-like inflation also increased 1.1% in the quarter across goods sold at Walmart. The retailer said it has more than 7,200 price roll-backs across the business, up 20% from a year ago.

Walmart guided for earnings per share between 70 cents and 74 cents for the second quarter, below a 75-cent consensus from analysts. For the full year, Walmart expects earnings between $2.75 and $2.85 per share, below the consensus estimate of $2.92.

WALMART US
The company’s U.S. business had total sales of $117.2 billion, up 4.5% compared with the same quarter in the previous fiscal year. Transactions increased 3%, and the average ticket rose 1.1% from a year ago. E-commerce sales rose 26% in the quarter, contributing half of the 4.1% comp sales gains from a year ago.

Adjusted operating income totaled $6 billion, up 5.7% from a year ago. Walmart said the increase reflects improved e-commerce economics. Walmart U.S. also reported advertising sales growth up 36% and double-digit growth in membership income.

Rainey said general merchandise categories performed well in the quarter across the marketplace – online site for third-party sellers – as Walmart continues to increase its assortment and speed of delivery. He said marketplace advertising spend increased 50% in the quarter from a year ago, which also lifted sales. He said membership fee income increased 5.6% as members gravitate toward Walmart’s omnichannel capabilities and fuel savings.

“This growth is encouraging, as Walmart Plus members generally spend four times more than non-members overall, with seven times more e-commerce visits each year, and in this period of elevated gas prices, members are tapping into their fuel savings benefits even more today, reinforcing the value of membership beyond free shipping,” said Rainey.

SAM’S CLUB
The club posted revenue of $23.4 billion in the quarter, up 6.1%. Comp sales increased 3.9% in the quarter, with transactions up 6.2% while average tickets decreased 2.2%. Without the e-commerce sales increase of 23%, Sam’s Club comp sales would have been negative. Operating income for the segment totaled $700 million, up 1.2% from a year ago.

Sam’s Club did return an 11% gain in membership income, driven in part by a 5.6% increase in membership fees.

Inventory increased 14.9%, primarily related to higher fuel costs and volumes. Fuel is a big business at Sam’s Club. The number of gallons of fuel sold in May at Sam’s Club increased 12%, while they were down 5% across the industry.

“That tells us that customers are coming to us looking for value, and it’s important to note that a fuel member spends 1.6% more per basket than a non-fuel member,” Rainey said during the recorded call with analysts.

WALMART INTERNATIONAL
Walmart’s diverse international business reported revenue of $35.1 billion, up 18.% from a year ago. On a constant currency basis, sales increased 10.1% to $32.8 billion, resulting from broad-based strength across markets with momentum in e-commerce and stores.

E-commerce sales in the segment increased 27%, led by store-fulfilled pickup and delivery and marketplace. The advertising business grew by 32%, driven by continued momentum at Flipkart.

Operating income totaled $1.6 billion, up 23.9% from a year ago. After current fluctuations, operating income gains totaled 10.2%. Operating income growth was driven by China and Flipkart.

Walmex reported sales of $12.2 billion, up 4.1%, with comp sales growth of 3.1% and e-commerce gains of 15%. The business in China had sales growth of 22.3% to $8 billion, led by e-commerce gains of 31%. Canada had sales growth of 7.4% to $5.5 billion, led by a 38% e-commerce gain compared to a year ago.

Shares of Walmart (NASDAQ: WMT) traded lower Thursday following executive commentary about higher energy costs and the impact on consumer spending. The stock opened at $124.41, down $6.41 from the previous day’s close. At midmorning, Walmart stock traded around $121.18, down $9.67 or 7.39% lower than Wednesday. Over the past 52 weeks, the share price has traded between $93.43 and $135.16. Year-to-date, the Walmart share price up 9.34%.