Walmart, the world’s largest retailer, raised its full-year earnings and sales outlook on Thursday as its e-commerce business continued to deliver double-digit growth. The move signals confidence in consumer demand, even as the company faces mounting costs tied to higher tariffs, insurance claims, and other one-time expenses.
The announcement underscores Walmart’s ability to navigate an increasingly complex retail landscape. While competitors struggle with supply chain challenges, rising prices, and shifting consumer behavior, Walmart has leaned into its scale, pricing power, and growing digital capabilities to strengthen its position.
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Stronger Forecast for Sales and Earnings
For the fiscal year, Walmart now expects net sales to grow between 3.75% and 4.75%, compared with its earlier forecast of 3% to 4%. The company also slightly raised its adjusted earnings-per-share guidance to $2.52 to $2.62, up from a prior range of $2.50 to $2.60.
Chief Financial Officer John David Rainey emphasized that the company is focused on keeping prices affordable for customers. Walmart has accelerated imports, managed costs at the item and category level, and increased its use of “Rollbacks,” the company’s signature limited-time discounts.
“There are certainly areas where we have fully absorbed the impact of higher tariff costs,” Rainey explained in an interview with CNBC. “In other areas, we’ve had to pass some of those costs along. But tariff-related expenses continue to drift upward.”
Second-Quarter Results Beat Expectations
Walmart’s fiscal second-quarter results outpaced Wall Street expectations in several key areas:
- Revenue: $177.40 billion vs. $176.16 billion expected
- Net income: $7.03 billion ($0.88 per share) vs. $4.50 billion ($0.56 per share) a year ago
- Comparable sales (U.S., excluding fuel): +4.6% vs. +4.0% expected
- Sam’s Club comparable sales (excluding fuel): +5.9% vs. +5.2% expected
Overall revenue rose from $169.34 billion in the same period last year, while earnings growth highlighted operational improvements and strong consumer demand.
E-Commerce and Omnichannel Growth
A key driver of Walmart’s success has been its rapidly expanding online business. Global e-commerce sales surged 25%, with the U.S. posting 26% growth. Store-fulfilled delivery, particularly in groceries, nearly doubled year over year. One-third of those orders were expedited, showing strong demand for convenience.
The retailer’s Walmart+ membership program, which includes benefits like free delivery and discounts on fuel, also supported e-commerce momentum. At the same time, Walmart’s digital advertising arm and third-party marketplace generated additional revenue streams, helping the company mark its first profitable quarter for e-commerce in May.
This performance demonstrates Walmart’s ability to compete with Amazon by combining its massive physical footprint with digital innovation.
Consumer Behavior Remains Resilient
Despite higher tariffs and inflationary pressures, Walmart reported no significant changes in consumer spending habits. Private-label sales, which typically gain traction when households tighten budgets, were flat compared to last year.
“Everyone is looking to see if there are any cracks in the armor,” Rainey said. “But consumer behavior has been very consistent. Customers continue to be resilient.”
U.S. shoppers increased both trips and spending:
- Transactions rose 1.5% year over year.
- Average ticket grew 3.1%.
These trends reflect the trust many consumers place in Walmart’s value proposition, especially during periods of economic uncertainty.
Managing Tariff Pressures
About one-third of Walmart’s U.S. merchandise is sourced from overseas, with China, Mexico, Canada, Vietnam, and India among its top import markets. Tariffs on these imports have been a persistent challenge.
In May, Walmart warned it would need to raise prices on certain items. This drew criticism from then-President Donald Trump, who publicly stated that Walmart should “eat the tariffs.” However, the retailer has carefully balanced absorbing costs in some categories while passing them along in others.
CNBC’s analysis of Walmart’s shelves found price increases in items such as cookware, jeans, and car seats. Rainey declined to specify additional products affected but confirmed the company’s strategy is to protect customers as much as possible.
Walmart has also shifted tactics by bringing in inventory earlier than usual. For example, Sam’s Club inventories were up 3.5% at the end of the quarter, while Walmart U.S. inventories rose 2.2%. This ensures that stores are well-prepared for the holiday season while avoiding sudden spikes in costs.
Competitive Edge in a Challenging Market
Even with tariff-related pressures, Walmart continues to outperform many retail rivals. Its reputation for low prices, combined with faster delivery services, has attracted more middle- and higher-income shoppers.
The company’s scale also provides leverage that competitors cannot match. By increasing investments in logistics, digital infrastructure, and supply chain efficiency, Walmart is well-positioned to handle rising costs better than smaller players.
Furthermore, its profitable e-commerce milestone highlights a turning point: Walmart is no longer losing money in online sales but instead driving growth through advertising, third-party sellers, and membership services.
Outlook: Balancing Growth and Costs
Looking ahead, Walmart remains cautiously optimistic. While tariffs and inflation pose ongoing challenges, consumer demand has shown remarkable resilience. With holiday shopping around the corner, Walmart’s ability to balance affordability with growth initiatives will be critical.
Rainey noted that the company’s strategy is to prepare for volatility while staying focused on value: “We’re trying to keep prices as low as we can. That’s always been our mission, and it’s even more important today.”
Frequently Asked Questions
Why did Walmart raise its sales and profit forecast?
Walmart increased its outlook due to strong performance in its e-commerce division, higher-than-expected comparable sales in the U.S., and steady consumer spending despite inflation and tariff pressures.
How much did Walmart’s revenue grow in the latest quarter?
Walmart reported revenue of $177.40 billion for the fiscal second quarter, up from $169.34 billion a year earlier, surpassing Wall Street expectations.
What role did e-commerce play in Walmart’s growth?
E-commerce sales jumped 25% globally and 26% in the U.S., driven by strong grocery delivery, Walmart+ membership growth, digital advertising, and its expanding third-party marketplace.
How are tariffs affecting Walmart’s costs?
Tariffs have increased the cost of many imported goods. Walmart has absorbed some of these expenses to protect customers but has raised prices on select products, including cookware, apparel, and baby gear.
Did Walmart’s profits increase despite higher costs?
Yes. Walmart’s net income rose to $7.03 billion, up from $4.50 billion a year ago. This increase reflects higher sales volume, cost efficiencies, and growth in digital revenue streams.
How are Walmart’s customers responding to inflation and price changes?
Walmart said consumer spending has remained consistent and resilient. Transactions increased 1.5% year over year, while the average ticket rose 3.1%, showing shoppers are both visiting more often and spending more per trip.
What are Walmart’s plans for the upcoming holiday season?
Walmart has been bringing in inventory earlier than usual, especially for Sam’s Club, to avoid supply chain disruptions and prepare for strong demand during the holiday period.
How does Walmart’s performance compare with its competitors?
Walmart has fared better than many retailers by leveraging its scale, low-price reputation, and growing digital channels. Its ability to offer value while expanding delivery and e-commerce services has given it an edge over rivals.
Conclusion
Walmart’s latest results highlight its strength as both a retail giant and a digital competitor. By raising its sales and profit outlook, the company has shown resilience in the face of rising tariffs and global cost pressures. Strong e-commerce growth, steady consumer demand, and smart inventory strategies have helped Walmart stay ahead of its competitors.