Walmart Inc. (WMT) Stock: Falls Over 4% on Tariff Concerns Despite Solid Q125 Sales

TLDR

Walmart stock fell over 4% after Q1 results and tariff-driven price warnings. Revenue grew 2.5% to $165.6 billion; EPS beat estimates at $0.61. Tariff costs are pressuring margins; gradual price hikes are already underway. Global e-commerce sales surged 22%, led by pickup and delivery. Walmart expects 3.5%-4.5% sales growth in Q2 but issued no profit forecast.

Walmart Inc. (NYSE: WMT) shares dropped over 4% at some point early Thursday, to trade at $91, after the company posted solid first-quarter sales on May 15, 2025, but warned that prices are rising due to trade policy shifts.

Walmart Inc. (WMT) 

Though adjusted earnings per share of $0.61 beat analyst expectations of $0.58, profit slipped from the year-ago quarter. CEO Doug McMillon confirmed that while Walmart will try to maintain its low-price edge, it cannot fully absorb the impact of recent tariffs.

Revenue rises, but pressure builds

Walmart reported revenue of $165.6 billion, up 2.5%, or 4.0% in constant currency. Operating income rose 4.3%, driven by higher gross margins and membership income. Global e-commerce sales increased 22%, fueled by in-store pickup, delivery, and marketplace growth. Despite this strength, the retailer did not provide a profit outlook for the second quarter due to volatility from shifting tariff policies.

$WMT Walmart Q1 FY26 (ending in April):

• Revenue +3% Y/Y to $165.6B ($1.2B beat).
• Non-GAAP EPS $0.61 ($0.03 beat).
• Walmart US comp sales +4.5%.
• E-commerce +22% Y/Y.
• Advertising +50% Y/Y.

FY26 Guidance:
• Net sales +3% to 4% Y/Y (unchanged). pic.twitter.com/DbqUfGd3w8

— App Economy Insights (@EconomyApp) May 15, 2025

Gross margin rose 12 basis points year-over-year, and Walmart’s U.S. comparable sales rose 4.5%. While health and grocery sales were strong, home and sporting goods lagged. Toys, auto goods, and kids’ apparel helped balance category performance. Advertising income also saw a 50% rise globally.

Tariff costs forcing price increases

The decision to raise prices comes amid a turbulent trade environment, as President Trump’s new tariff deal cut proposed import taxes on Chinese goods from 145% to 30%, with a 90-day pause on some rates. Still, retailers are facing high shipping and material costs. McMillon noted that price hikes began as early as April and intensified in May.

🚨 WALMART RAISING PRICES DUE TO TARIFFS

Walmart has announced it will raise prices as Trump's trade war increases costs for the company.

“We will do our best to keep our prices as low as possible but given the magnitude of the tariffs, even at the reduced levels announced this… pic.twitter.com/ATHddHr63m

— MeidasTouch (@MeidasTouch) May 15, 2025

Two-thirds of Walmart’s merchandise is U.S.-sourced—largely groceries, which comprise 60% of its U.S. business. Still, imports from China and Latin America in categories such as electronics, toys, and produce are under cost pressure. Walmart is working with suppliers to switch to alternative materials where possible, such as fiberglass instead of aluminum.

Strategic adjustments and outlook

Despite the uncertainty, Walmart expects Q2 sales growth between 3.5% and 4.5% and has reiterated its full-year guidance. The company raised $4 billion in long-term debt for general corporate purposes and reported a return on assets of 7.5% and return on investment of 15.3%.

As one of the first major U.S. retailers to report this season, Walmart’s results signal how U.S. shoppers are behaving in a high-cost, tariff-sensitive environment. The company’s moves—both in pricing strategy and operational adjustments—will be closely watched in the coming months.

 

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