In a climate of economic uncertainty and shifting trade dynamics, Walmart’s first-quarter fiscal 2026 earnings report delivered a message of resilience coupled with cautionary notes about the future. The world’s largest retailer exceeded profit expectations while signaling potential price increases for consumers in the coming weeks.

Listen to our chat on Walmarts rising sales and tariff concerns for the future:

Earnings Beat Expectations, E-commerce Reaches Milestone

Walmart reported adjusted earnings per share of $0.61, surpassing analysts’ expectations of $0.58, on revenue that increased 2.5% to $165.61 billion. While revenue fell slightly short of the $165.99 billion anticipated by analysts, U.S. same-store sales grew by an impressive 4.5%, driven primarily by strength in health, wellness, and grocery segments.

In a significant development for the company’s digital strategy, this quarter marked the first time Walmart’s e-commerce operations achieved profitability. Net U.S. e-commerce sales surged by 21%, fulfilling a promise the company made to investors earlier this year.

“We achieved a robust first quarter in a fluctuating operating landscape,” said Walmart CEO Doug McMillon during the earnings call, as reported by Investopedia. He emphasized that the company remains “well-positioned, retaining the agility to maneuver through the short term while continuing to invest for long-term value creation.”

Tariff Concerns Cloud Future Guidance

Despite the strong quarterly performance, Walmart took the unusual step of withholding specific operating income guidance for the second quarter, citing difficulties in forecasting amid potential tariff impacts. The company did maintain its full-year outlook and projected second-quarter revenue growth between 2.5% and 3.5%.

CFO John David Rainey explained the decision during a CNBC interview, noting that Walmart’s retail accounting method, which uses a cost-to-sales price ratio, becomes particularly challenging to predict when tariff rates fluctuate significantly. “Considering the volatile environment and the broad spectrum of potential short-term outcomes that are exceptionally challenging to foresee, we believed it prudent to refrain from offering a specific forecast for operating income and EPS for the second quarter,” Rainey stated according to Investopedia’s reporting.

Consumer Price Increases Looming

In perhaps the most concerning development for consumers, Rainey indicated that price hikes may be imminent. “We will absorb some of the price increases and suppliers will too, but consumers are likely to see some price increases and that concerns us,” he told CNBC.

Walmart imports approximately one-third of its U.S. merchandise, with China being the largest source, followed by Mexico, Canada, India, and Vietnam. While acknowledging progress in negotiations with the administration regarding tariff levels announced in April, Rainey expressed that “they are still too high.”

Supply Chain Management as Competitive Edge

As retailers navigate the complex trade environment, Rainey emphasized inventory management as a critical differentiator. “We have not canceled any orders with suppliers. We have reduced some orders on occasion,” he noted to CNBC, suggesting Walmart is taking a measured approach to inventory control rather than making dramatic supply chain adjustments.

The company’s ability to maintain strong same-store sales growth—marking approximately 33 consecutive quarters of positive comparable sales according to CNBC’s reporting—demonstrates its continued appeal to value-conscious consumers in an inflationary environment.

Investors responded positively to the earnings report, with Walmart shares climbing nearly 3% in premarket trading. The stock has risen approximately 7% year-to-date according to Investopedia, outperforming many retail peers in a challenging economic landscape.

As the retail giant navigates the remainder of fiscal 2026, all eyes will be on how effectively it can balance tariff pressures, consumer price sensitivity, and its continuing digital transformation.