Walmart stock holds firm as strong first-quarter sales and profit support guidance

Walmart stock is backed by resilient US consumer demand after the retailer reported higher first-quarter sales and profit and kept its full-year guidance, highlighting its role as a defensive name in the US retail sector.

Walmart stock is underpinned by steady fundamentals after the US retail group (ISIN US9311421039) reported higher sales and profit for its first quarter of fiscal 2025, confirming the resilience of its broad grocery and general merchandise business in a cautious consumer environment. In its fiscal 2025 first-quarter report dated 16 May 2025, Walmart highlighted that it continues to win share in categories such as groceries and health and wellness while maintaining price leadership for value-conscious shoppers. For investors, the combination of rising sales, growing membership income and disciplined cost control underscores why the company remains a core holding in the US consumer staples and discretionary landscape.

Revenue up over seven percent

According to Walmart's fiscal 2025 first-quarter results for the period ended 30 April 2025, total revenue reached about $161.5 billion, representing growth of roughly 6 percent compared with the same quarter of the prior year when revenue was around $152.3 billion. The company reported that this increase was driven by higher comparable sales in its US segment as well as continued expansion of its international and Sam's Club operations. Management also pointed to growth in membership and advertising income as additional contributors to top-line performance in the quarter.

In the same fiscal 2025 first-quarter report, Walmart stated that operating income increased faster than sales, with operating profit rising by more than 9 percent year on year to approximately $6.5 billion from about $6.0 billion in the first quarter of fiscal 2024. The company attributed this improvement to a combination of sales leverage, mix benefits from higher-margin businesses such as membership and advertising, and ongoing productivity initiatives across its stores and supply chain. For shareholders, the gap between revenue growth and profit growth suggests that the retailer is still finding efficiency gains even as it invests in wages, technology and e-commerce capabilities.

Comparable sales and earnings drive outlook

Walmart's key US comparable sales metric underlined the strength of its domestic operations. In the fiscal 2025 first quarter, Walmart U.S. comparable sales excluding fuel grew by about 3.8 percent compared with the prior-year period, following an increase of roughly 7.4 percent in the same quarter a year earlier. The company has emphasized that its ability to offer value in essential categories such as groceries continues to draw higher-income customers as well as its traditional shopper base, supporting traffic growth even as some discretionary categories remain mixed.

On the earnings side, Walmart reported diluted earnings per share from continuing operations of approximately $0.60 in the fiscal 2025 first quarter, compared with about $0.57 in the first quarter of fiscal 2024. This equates to an increase of around 5 percent year on year, helped by higher operating income and a relatively stable tax rate. The company also pointed to adjusted earnings per share that exclude certain items, which grew at a similar pace, reinforcing the message that underlying profitability is trending upward.

In terms of guidance, Walmart reaffirmed its full-year fiscal 2025 outlook following the first-quarter release. The company indicated that it continues to expect net sales to increase by around 3 to 4 percent and adjusted earnings per share to grow by a mid-to-high single-digit percentage range compared with fiscal 2024. This guidance reflects management's view that the retailer can sustain growth through a combination of store productivity, e-commerce expansion and the scaling of newer profit streams such as advertising and marketplace services.

Walmart Connect and marketplace scale

A growing part of Walmart's strategy is to expand higher-margin revenue streams such as advertising and marketplace services, which complement its large physical-store base. In the fiscal 2025 first quarter, the company reported that global advertising revenue, led by its Walmart Connect platform in the United States, grew by over 24 percent year on year. This follows a period in fiscal 2024 when advertising revenue also grew at a double-digit rate, underscoring how the retailer is monetizing shopper data and traffic by offering brands targeted placements on its digital and in-store channels.

The marketplace business, where third-party sellers list products on the Walmart platform, is another contributor to the diversification of the revenue mix. Walmart has disclosed that the number of marketplace sellers continues to rise, and that gross merchandise volume from this channel is growing faster than overall company sales. Although the company has not provided a separate revenue figure for marketplace in the fiscal 2025 first-quarter summary, management has repeatedly highlighted that marketplace and advertising, taken together, represent important building blocks for future margin expansion because they carry structurally higher profitability than core retail sales.

These newer income streams sit alongside more traditional profit drivers such as Sam's Club membership fees. In the fiscal 2025 first quarter, membership income increased by about 13 percent compared with the prior-year period, supported by both higher membership counts and price adjustments made earlier in the membership cycle. For investors following Walmart stock, membership trends are closely watched because they signal customer loyalty and recurring revenue strength, which can support the company's valuation through economic cycles.

Sam's Club and international operations

Sam's Club, Walmart's membership-based warehouse format in the US, continued to perform well during the fiscal 2025 first quarter. The company reported that Sam's Club US comparable sales excluding fuel increased by around 4.4 percent year on year, supported by strong traffic and continued momentum in membership. This compares with a comparable sales increase of roughly 7.0 percent in the same quarter a year earlier, indicating that growth has moderated but remains clearly positive. The warehouse club segment benefits from a mix of bulk groceries, general merchandise and services that appeal to both small business customers and families seeking value.

Internationally, Walmart's operations in markets such as Mexico, Canada, China and India also contributed to overall growth. In the fiscal 2025 first quarter, the company reported that its international segment generated net sales growth of about 9 percent year on year, benefiting from solid performance at formats like Bodega Aurrerá in Mexico and continued expansion of e-commerce and wholesale operations. Currency effects can influence reported international revenue, but Walmart has indicated that on a constant-currency basis the growth rate remained strong, reflecting both traffic gains and unit expansion in key markets.

The integration of digital and physical channels in these international markets is an ongoing focus. Walmart is using learnings from its US e-commerce and omnichannel initiatives, such as curbside pickup and last-mile delivery, to adapt offerings to local customer preferences abroad. This approach is intended to reinforce the retailer's competitive position against both traditional rivals and pure-play online competitors in each region.

Grocery and health services remain core

Grocery remains the cornerstone of Walmart's business model and a critical driver of traffic to its stores and digital platforms. Over the past several years, the company has expanded its fresh and perishable assortments, invested in private-label offerings and emphasized everyday low prices to win and keep budget-conscious consumers. This strategy has been especially important in periods of elevated food inflation, when shoppers are more sensitive to price differences between retailers. The fiscal 2025 first-quarter results suggest that Walmart continued to gain or defend market share in food categories, with management highlighting that its combination of price, assortment and convenience is compelling for a wide range of household income levels.

Health and wellness is another area where Walmart is increasingly active. The company operates pharmacies, vision centers and selected health clinics within or adjacent to its stores, offering an expanding range of services and products. In its recent communications, Walmart has underlined that health and wellness categories delivered solid growth, benefiting from demand for prescriptions, over-the-counter medicines and related merchandise. While health services still represent a relatively small portion of overall revenue, they are strategically important because they can deepen customer relationships and provide additional reasons to visit Walmart locations.

From the perspective of Walmart stock, the emphasis on essential, recurring-purchase categories such as groceries and health care-related items supports the argument that the business has defensive characteristics. Even when consumers reduce spending on discretionary goods like electronics or apparel, they continue to buy necessities, and Walmart's scale allows it to compete aggressively on price. As long as the company can preserve margins while fulfilling this role, investors may view it as a relatively stable component within a diversified equity portfolio.

Walmart stock and market valuation

Walmart shares trade on the New York Stock Exchange under the ticker WMT, and the company is a member of the Dow Jones Industrial Average as well as the S&P 500 index. As one of the largest components within US equity benchmarks, Walmart stock tends to be widely held by both institutional and retail investors, and its performance can influence sector-level indices for consumer staples and discretionary names. The company also has a long history of paying dividends, having increased its annual dividend payout for many consecutive years.

In addition to dividends, Walmart has used share repurchases as a tool to return capital to shareholders. Over recent fiscal years, the company has allocated several billion dollars annually to buy back its own shares, reducing the share count and supporting earnings per share growth. The balance between reinvestment in the business, debt management, dividend payments and share repurchases is a key element of Walmart's capital allocation framework and is frequently discussed in its earnings materials and at investor events.

Valuation ratios such as the price-to-earnings multiple and enterprise-value-to-EBITDA are often used to compare Walmart stock with peers in the global retail and consumer sector. Because Walmart combines defensive grocery exposure, faster-growing e-commerce and advertising components and significant international operations, its valuation can trade at a premium to some traditional brick-and-mortar retailers, yet at a discount to certain high-growth online platforms. For market participants, the trajectory of same-store sales, margin trends and cash flow generation will remain central in assessing whether the current valuation is justified.

Everyday Low Prices as a product concept

One of the most recognizable aspects of Walmart's offering is its Everyday Low Prices concept, which underpins the assortment across the company's supercenters, discount stores, neighborhood markets and digital channels. This approach aims to provide consistently low prices rather than relying primarily on temporary promotions, encouraging customers to shop frequently and build trust that the prices they see are competitive without the need for extensive comparison. The company has noted that this pricing philosophy is particularly relevant when consumers face inflation or economic uncertainty, as it positions Walmart as a destination for stretching household budgets.

In practice, Everyday Low Prices are supported by Walmart's scale purchasing, global sourcing network and logistics capabilities. By buying large volumes directly from manufacturers and using its distribution infrastructure efficiently, the company seeks to negotiate favorable terms and pass a portion of the savings on to customers. The concept is not tied to a single product but is reflected in categories ranging from groceries and household essentials to apparel and electronics. Over time, Walmart has also aligned its private-label brands with the Everyday Low Prices strategy, offering alternatives that can carry higher margins for the retailer while still delivering value for shoppers.

Current positioning of Walmart stock

Walmart stock reflects a business that is balancing mature, cash-generating store operations with newer, higher-growth activities such as e-commerce, advertising and marketplace services. The fiscal 2025 first-quarter numbers show that revenue, operating income and earnings per share are all higher than a year earlier, with total revenue up about $9.2 billion, operating income up roughly $0.5 billion and diluted EPS increasing by about $0.03. These incremental gains demonstrate that Walmart is finding ways to grow even in a competitive and price-sensitive retail landscape.

From a risk perspective, investors in Walmart stock remain attentive to factors such as consumer spending trends, wage and input cost inflation, competitive pressures from both traditional retailers and online platforms, and currency fluctuations affecting international earnings. The company's ongoing investments in automation, technology and supply chain modernization are intended to mitigate some of these risks by improving efficiency and customer experience. Nevertheless, future quarters will continue to be judged on the ability of Walmart to sustain positive comparable sales, protect margins and execute on its long-term strategic initiatives.

Key data on Walmart

• Company: Walmart Inc.
• ISIN: US9311421039
• Ticker: NYSE: WMT
• Trading venue: NYSE
• Sector / Industry: Consumer Staples / Food and Staples Retailing
• Index membership: Dow Jones Industrial Average, S&P 500