Walmart(US:WMT) Hua Er Jie Jian Wen·2025-05-15 11:57Core Viewpoint - Walmart's Q1 net sales increased by 2.5% to $165.6 billion, slightly below expectations, while comparable sales grew by 4.5%, exceeding analyst forecasts [1][4]. Financial Performance - The company maintained its annual sales and profit forecasts for FY2026, expecting adjusted EPS between $2.50 and $2.60, with annual sales growth of 3% to 4% [3][10]. - Q1 operating income reached $7.14 billion, a 4.3% year-over-year increase, with a gross margin of 24.2%, up 12 basis points [4]. - The U.S. segment reported net sales of $112.2 billion, a 3.2% increase, with comparable sales growth of 4.5% [6][7]. E-commerce and Digital Growth - Global e-commerce sales grew by 22%, driven by in-store pickup, delivery, and third-party platforms, contributing approximately 350 basis points to U.S. comparable sales [5][8]. - The U.S. advertising revenue increased by 31%, excluding the newly acquired VIZIO, while global advertising revenue rose by 50% [5]. Market Resilience and Challenges - The U.S. market demonstrated strong resilience, particularly in health, wellness, and grocery categories, leading to a 7.0% increase in operating profit for the U.S. segment [6][8]. - CFO John David Rainey highlighted the challenging retail environment due to rapid price increases driven by tariffs, indicating that retailers cannot absorb all cost pressures [3][10]. International Performance - Walmart's international sales reached $29.8 billion, with a 7.8% increase when adjusted for currency, although operating income fell by 17.5% due to strategic investments in markets like Flipkart and Walmex [8][9]. Economic Outlook - The company is accelerating the development of high-margin digital businesses, including advertising and membership services, amidst declining consumer confidence and concerns over a potential economic recession [10].