Walmart Q1 Earnings Preview: Tariff Uncertainty, E-Commerce Momentum, and Consumer Shifts in Focus

Walmart (WMT) will report fiscal Q1 2026 earnings Thursday morning, and investors are bracing for a print that reflects both resilience and uncertainty. As the largest U.S. retailer, Walmart sits at the center of the conversation around tariffs, consumer sentiment, and supply chain volatility. While topline growth is expected to hold firm, questions linger around profitability, cost pressures, and the health of the consumer. With the U.S.-China tariff standoff in a 90-day pause and inflation data arriving just two days before the report, Walmart’s commentary could shape both retail sentiment and broader market expectations.

Consensus estimates call for revenue of approximately $166 billion and adjusted EPS of $0.59. Same-store sales (SSS) in the U.S. are expected to rise around 3% to 4%, in line with company guidance. Analysts from Citi and Jeffries anticipate a modest EPS beat, with Citi forecasting $0.60 and revenue growth supported by strong U.S. comps and e-commerce strength. Walmart reiterated full-year guidance last month, calling for net sales growth of 3%-4% and EPS between $2.50 and $2.60, but widened the range for Q1 operating income growth due to mixed category demand, rising expenses, and a desire to preserve pricing power in the face of tariffs.

Watch: How are retailers fighting back against tariffs?

The key watch area for this report is the impact of global trade policy. Walmart management has been cautious but confident, acknowledging at its April analyst day that "we are not unfamiliar with tariffs". and that they haven't yet canceled orders from China, India, or Mexico. CTO Ram Reddy of Nagarro recently said in an interview with AInvest that companies like Walmart are using the 90-day tariff pause to build AI models to optimize future supply chain decisions. He emphasized that while the short-term impacts are muted, the groundwork laid now will shape sourcing and pricing strategy in Q3 and beyond. In this light, Walmart’s ability to use scale, data, and tech to mitigate tariff pressures will be a major focus for analysts.

Beyond trade dynamics, investors will scrutinize Walmart’s progress in e-commerce and higher-margin segments. The retailer expects e-commerce to eventually comprise 60% of U.S. sales, and for Q1, the online segment is forecast to be profitable—a critical milestone. Last quarter, Walmart delivered 20% e-commerce growth in the U.S. and reached profitability in the channel, aided by strong marketplace momentum and fulfillment infrastructure. Analysts from RBC and Bank of America see continued strength here, with BoA expecting e-commerce growth of 18% in Q1 versus a 16% consensus.

Another structural growth vector is Walmart Health, advertising, and membership services. These higher-margin businesses are scaling and support the long-term EPS trajectory, with Mizuho projecting $4 EPS by FY30. The April analyst day reinforced that WMT’s transformation into a tech-enabled, omni-channel operator is gaining traction. Analysts from Citi and BMO came away impressed by Walmart’s distribution center automation and Sam’s Club digital transformation, suggesting the company is years ahead of competitors in supply chain and delivery capability.

On the consumer front, Walmart’s positioning as a low-price leader remains its best asset. The company reported that delivery coverage now reaches 93% of U.S. households, and its pricing gap over peers continues to widen. This is particularly relevant as inflation and recessionary fears weigh on upper-income consumers. Piper Sandler noted a sharp decline in affluent sentiment, which could benefit Walmart at Target’s expense. Moreover, Walmart's heavier mix of consumables and domestic sourcing reduces its near-term tariff exposure compared to competitors, reinforcing its defensive stature.

That said, some caution is warranted. RBC noted that sales trends have been "choppy" and expense growth has run above initial expectations. The company also cited a less favorable category mix and higher casualty claims as reasons for widening Q1 operating income guidance. Management has indicated that pricing flexibility will be prioritized over margin expansion in the short term—a decision welcomed by some analysts (like Bernstein), but one that could keep EPS growth modest.

In terms of valuation, Walmart shares have outperformed both the retail sector and broader S&P 500 in 2025, gaining nearly 13% YTD. At ~36x forward earnings, the stock is priced for consistent execution. Historical performance around earnings has been mixed—Walmart has beaten EPS estimates in every quarter for the past two years, but share price reactions have often been muted or negative due to elevated expectations.

Ultimately, the setup for this quarter hinges less on the absolute numbers and more on the tone of management commentary. Investors want clarity on how Walmart is adapting to the fluid tariff landscape, whether AI tools are being deployed to future-proof sourcing, and how sticky the recent gains in higher-income consumers are proving to be. With the April CPI data now in hand and tariffs still in limbo, Walmart’s read on consumer behavior and supply chain positioning could help set the tone for retail earnings season.

In sum, while expectations are high and the stock is priced accordingly, Walmart enters Q1 earnings with multiple structural tailwinds: e-commerce profitability, market share gains across demographics, a margin-accretive services portfolio, and tariff insulation via scale and sourcing diversity. But with elevated valuation and tariff tremors still unresolved, even a solid beat may not be enough without forward-looking confidence from the C-suite.