Walmart’s modest sales growth shows positive signs amid tariff uncertainty

Walmart store sign
Walmart has reported a modest uplift in sales for the first quarter. (Source: Bigstock)

Walmart has reported a modest uplift in sales for the first quarter, which signals that consumer spending at the chain remains on track despite tariff-related challenges.

Revenue for the quarter ended April 30 rose 2.5 per cent to $165.6 billion (up 4 per cent on constant currency). The company noted there was a 100 basis points headwind from lapping leap day.

Global e-commerce sales grew 22 per cent, led by store-fulfilled pickup and delivery and marketplace. Global advertising business grew 50 per cent, with Walmart Connect in the US up 31 per cent.

According to GlobalData MD Neil Saunders, Walmart’s sales increase shows that the “signal is still on green” despite the retail economy being on tariff-related tenterhooks.

“While tariffs are disruptive for Walmart, the business is in a better position than many to weather the storm,” he remarked.

Saunders explained that grocery, which is the focus of operations, is less exposed to tariff pressures and it is also one of the categories where consumers will continue to prioritize spending out of necessity.

“It is also clear that if prices rise across the retail sector, Walmart will see at least a partial replay of the dynamics of the past few years when inflation drove more shoppers, including those from higher income cohorts, through its doors,” he added.

Strategies such as the refurbishment and elevation of stores, the development of the marketplace, and the push to drive incremental revenue streams are giving the chain a lot of ammunition, the analyst continued.

On the bottom line, operating income was up 4.3 per cent, including a 250 bps headwind from lapping leap day. Consolidated net income fell 12 per cent to $4.6 billion.

The company expects net sales to increase 3.5-4.5 per cent in the second quarter and 3-4 per cent for the full year.

“Although the waves caused by tariffs now seem to be calmer, it would be incorrect to assume that the waters are completely safe.

“In our view, Walmart remains one of the sturdiest ships in retail and, relatively speaking, it will come out of this in a much better state than many other players,” Saunders concluded.

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