Walmart Raises Sales and Earnings Forecast Despite Rising Tariff Costs

Walmart reported a mixed yet largely positive performance for the fiscal second quarter, highlighting strong sales growth, particularly in its online and e-commerce segments, despite rising costs from tariffs. The company raised its full-year sales forecast to 3.75–4.75% growth, up from the previous 3–4%, and slightly increased its adjusted earnings per share projection to $2.52–$2.62. Rising tariffs and one-time expenses, including restructuring, insurance claims, and litigation settlements, put pressure on profits. Chief Financial Officer John David Rainey emphasized Walmart’s strategy of keeping prices low through selective pricing, early inventory, and faster home deliveries, though tariff-related costs continue to rise.

Net income for the three-month period ending July 31 reached $7.03 billion, or 88 cents per share, compared with $4.50 billion, or 56 cents per share, a year ago. Adjusted earnings per share, accounting for one-time items, were 68 cents. Revenue grew from $169.34 billion year-over-year. Walmart U.S. comparable sales increased 4.6% excluding fuel, exceeding analysts’ expectations of 4%, with grocery and health and wellness categories driving growth. Sam’s Club comparable sales grew 5.9%, higher than the projected 5.2%. Globally, e-commerce sales rose 25% and U.S. e-commerce sales jumped 26%, reflecting strong growth in both online purchases and advertising revenue. Store-fulfilled grocery and item delivery in the U.S. grew nearly 50%, with one-third of orders expedited. Some faster deliveries are fee-based, while others are included under Walmart+ subscriptions.

Walmart’s advertising business also saw substantial growth. Globally, revenue increased 46%, including contributions from Vizio, the $2.3 billion smart TV acquisition. U.S. advertising through Walmart Connect grew 31%. E-commerce profitability doubled from the prior quarter, marking a significant milestone as the company recorded its first profitable quarter for its global and U.S. online business. Customer visits and spending increased, with transactions rising 1.5% year-over-year and average ticket values up 3.1%.

CEO Doug McMillon noted that middle- and lower-income households were more sensitive to tariff-induced price increases, particularly in discretionary categories, leading some to shift purchases to alternative items or categories. Nevertheless, overall consumer spending remained stable, and Walmart’s value-driven positioning, faster delivery services, and exclusive brands helped it outperform rivals like Target, whose sales continued to decline. Walmart also expanded its third-party marketplace, adding prestige beauty brands and trend-focused products.

General merchandise sales, outside grocery, showed modest but consistent gains, while clothing and fashion sales were particularly strong, helping offset inflation-related pressure on discretionary spending. Walmart continues to navigate rising tariff costs and operational pressures by managing pricing selectively, advancing inventory, and leveraging its e-commerce and advertising platforms. Overall, Walmart demonstrated resilience and strategic adaptation, maintaining growth and profitability across multiple business segments despite macroeconomic challenges and cost pressures, positioning itself as a strong competitor in the U.S. retail market.

This quarter highlighted Walmart’s ability to balance cost pressures with consumer demand, expand its e-commerce and advertising revenue, and capitalize on its reputation for value and convenience, ensuring steady performance in both domestic and global markets.