Walmart US eCommerce Sales Jump 21%; McMillon Cites Tariff-Proof Factors

Core Insights - Walmart's eCommerce performance is strong, with a 21% increase in U.S. sales and achieving profitability in U.S. eCommerce for the first time, which helps mitigate cost pressures from tariffs and supply chain issues [1][12][10] Financial Performance - First-quarter revenue growth was 2.5%, slower than projected, with U.S. comparable store sales growing by 4.5% driven by increased transactions and average ticket size [2][4] - The company anticipates sales growth of 3.5% to 4.5% in the current quarter, maintaining full fiscal year sales guidance at 4% [5] eCommerce and Membership Growth - eCommerce sales increased by 21%, with significant growth in store-fulfilled pickup and delivery, and Walmart Connect advertising growing by 31% [7][10] - Membership-related income rose by 3.8%, with Walmart+ fees experiencing double-digit growth [7][12] Tariff Impact and Cost Management - Tariffs are creating unprecedented cost pressures that Walmart cannot fully absorb due to narrow retail margins, particularly on products sourced from China [2][9] - The company is managing costs by absorbing some tariff impacts within categories and diversifying profit streams through eCommerce and advertising [10][9] Operational Insights - Delivery speed is a key driver of business, with a 91% increase in deliveries under three hours compared to the previous year [8] - Over 50% of Sam's Club members now transact digitally, indicating a shift towards omnichannel commerce [11] Market Outlook - The operating environment is fluid, making near-term earnings forecasts difficult due to the dynamic nature of tariffs and cost pressures [14][2] - The company remains cautiously optimistic, leveraging its scale and supplier base to navigate macroeconomic challenges [4][3]