Walmart 2026 Q1 Earnings Net Income Declines by 12.6%

Walmart (WMT), ranking 13th by market capitalization, reported its fiscal 2026 Q1 earnings on June 6th, 2025. Walmart's results showed a decline in key metrics, with EPS falling 11.1% and net income decreasing by 12.6%, reflecting challenges in the current market environment. The company's guidance for fiscal year 2026 remained in line with earlier estimates, projecting revenue between $694.74 billion and $701.48 billion and adjusted EPS from $2.50 to $2.60. Despite these challenges, Walmart continues to focus on strategic investments to support growth.

Revenue

In fiscal 2026 Q1, Walmart's total revenue rose by 2.5% to $163.98 billion from $159.94 billion in the previous year. The Walmart U.S. segment contributed $112.16 billion, while Walmart International generated $29.75 billion. Sam’s Club U.S. added $22.06 billion in revenue, and the Membership and other income segment brought in $1.63 billion. The consolidated revenue for the quarter reached $165.61 billion.

Earnings/Net Income

Walmart's earnings per share (EPS) declined by 11.1% to $0.56 in fiscal 2026 Q1, down from $0.63 in the same quarter of the previous year. The company's net income decreased to $4.64 billion, reflecting a 12.6% decline from the $5.31 billion reported in fiscal 2025 Q1. These results indicate a challenging quarter for Walmart's profitability.

Price Action

The stock price of Walmart has edged down 0.91% during the latest trading day, has edged down 1.27% during the most recent full trading week, and has edged down 1.10% month-to-date.

Post-Earnings Price Action Review

The strategy of purchasing Walmart (WMT) shares when revenue misses expectations and holding them for 30 days has delivered impressive results, boasting a return of 125.75% and a Sharpe ratio of 0.87, which underscores favorable risk-adjusted returns. However, a maximum drawdown of -27.84% indicates that this strategy carries substantial risk, rendering it more suitable for seasoned investors or those with a high risk tolerance. Despite the inherent risks, the strategy has demonstrated notable profitability, driven by Walmart's consistent market performance and adept handling of operational challenges. For investors seeking to capitalize on short-term market fluctuations, this approach presents a compelling opportunity, provided they possess the requisite experience and risk appetite to navigate the inherent volatility.

CEO Commentary

Doug McMillon, CEO of Walmart, highlighted the company's robust performance driven by effective inventory management and strategic pricing. He noted that while the company faced challenges from tariffs, strong traffic and unit growth in Walmart U.S. and significant contributions from e-commerce sales were key growth drivers. McMillon emphasized ongoing investments in technology and automation as vital for enhancing operational efficiency and customer experience. He expressed an optimistic outlook, stating that despite external economic uncertainties, Walmart remains well-positioned for continued growth through its omnichannel strategy and value proposition.

Guidance

Walmart provided fiscal year 2026 guidance, expecting revenue in the range of $694.74 billion to $701.48 billion. The company anticipates adjusted earnings per share (EPS) between $2.50 and $2.60. Additionally, Walmart projects capital expenditures to remain consistent with prior estimates, reflecting its commitment to strategic investments while navigating current market conditions.

Additional News

In recent developments, Walmart has expanded its drone delivery services to five major urban areas, enhancing its logistics capabilities and customer convenience. This initiative reflects Walmart's commitment to integrating advanced technology into its operations, aiming to improve delivery efficiency and meet evolving consumer expectations. Furthermore, Walmart's recent acquisition of Vizio highlights its strategic move to diversify its product offerings and bolster its electronics segment. This acquisition is expected to complement Walmart's existing technology portfolio and drive future growth. Lastly, Walmart's board of directors announced a 13% increase in its annual dividend, marking the 52nd consecutive year of dividend growth, underscoring the company's strong financial position and commitment to returning value to shareholders.