Walmart (NYSE:WMT) impressed Wall Street once again, with its stock rising as much as 7% in early trading on Thursday following a robust earnings report.
For fiscal 2025 Q1, Walmart reported revenue of $161.51 billion, exceeding the expected $159.58 billion. Adjusted earnings per share were also higher, at $0.60 compared to the estimated $0.53.
“Customers are continuing to come to Walmart for not only value but also convenience,” Walmart CFO John David Rainey told Yahoo Finance. “We see that wallets are still stretched, customers are still looking for value.”
CEO Doug McMillon added, “The momentum we see across the business is driven by growth in units sold and transaction counts as well as market share gains, including in general merchandise. These are not inflation-driven results.”
Total U.S. same-store sales increased by 3.9% year-over-year, with Sam’s Club leading the growth at 4.4% as Americans sought deals on grocery items. Sam’s Club also achieved a record high in member counts, with membership income growing by more than 13%. Walmart’s namesake stores saw same-store sales grow by 3.8%, primarily due to increased customer visits, although ticket sizes remained flat. The company noted it was gaining market share among higher-income households.
Global e-commerce sales surged by 21%, driven by store pickup, delivery services, and its online marketplace.
These strong results come as Walmart plans to cut hundreds of jobs and relocate employees to its headquarters in Bentonville, Arkansas, as reported by the Wall Street Journal on Tuesday. Walmart remains the largest U.S. employer, with 1.6 million workers in the country.
During the quarter, Walmart also conducted its 12th stock split in 50 years. Its shares have risen by 13.9% this year, outperforming the S&P 500’s (^GSPC) 10% gain.
UBS analyst Michael Lasser noted that “the stock has room to run,” highlighting Walmart’s consistency and insulation from ongoing macro pressures. Deutsche Bank analyst Krisztina Katai added that Walmart is positioned to attract both low- and high-end consumers in the coming years. HSBC analyst Daniela Bretthauer called Walmart a top pick, emphasizing its strong position in the omnichannel grocery market compared to competitors like Amazon (NASDAQ:AMZN).
While merchandise sales dropped slightly, consistent with the last three quarters, U.S. grocery sales increased in the mid-single digits, driven by fresh foods and private brand items, according to Stifel managing director Mark Astrachan. Walmart benefits from its pricing power, economy of scale, tech investments, and $9 billion in store makeovers.
Recently, Walmart introduced a new private label brand named bettergoods, offering high-quality, trendy items priced between $2 and $15. Its ad business also saw a boost, with a 24% increase in global sales and a 26% rise in U.S. sales. The Walmart+ subscription service grew by double digits, with members engaging more frequently and spending more.
For fiscal year 2025, Walmart expects net sales to grow by 3% to 4% and operating income by 4% to 6%. “We will revisit our full-year guidance as we exit the second quarter. This is more aligned with our historic cadence of updates and consistent with the philosophy we have as a management team to recognize early momentum, but to also maintain prudence early in the year given the macro uncertainty and so much of the year is still ahead of us,” Rainey said on a call with investors.
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