The retail industry is highly sensitive to trade tensions due to its heavy reliance on imported goods, particularly from China. US retailers face the risk of a tariff-induced slowdown, at a time when the market is recovering from inflationary pressures and reduced consumer spending. As Walmart, Inc. (NYSE: WMT) prepares to report earnings next week, investors will be looking for insights into the unfolding trade scenario.
The store chain’s sales have been under pressure in recent months, reflecting uncertainties in the retail landscape and changing consumer behavior. Recovering from a 5-month low, Walmart’s stock has grown about 18% in the past 30 days. The value has increased steadily in the past month, moving closer to the record highs of February. Despite the gains, it appears that WMT still has room for further growth, given the company’s impressive track record of effectively navigating various challenges.
Q1 Report on Tap
The company’s first-quarter 2026 report is expected to be out on Thursday, May 15, at 6:55 am ET. Analysts’ consensus estimate is for adjusted earnings of $0.58 per share, which represents a 3% decrease from the corresponding quarter of fiscal 2025. Meanwhile, revenues are expected to grow about 3% year-over-year to $164.58 billion in Q1. Over the past several quarters, sales and the bottom line have consistently beaten Wall Street’s expectations.
From Walmart’s Q4 2025 earnings call:
“As we’ve been saying, tariffs are something we’ve managed for many years, and we’ll just continue to manage that. We’ve got a great team. We know how to do that. We can’t predict what will happen in the future, but we can manage it really well. And we’re wired to try and save people money. So that will be our ultimate goal. And, as it relates to delivery speed, it’s important, and we’re seeing behavior with our customers and members around the world that causes us to be excited about what’s possible, and having these assets so close to people is such a big advantage and the stores are doing a great job of improving order quality and delivering with speed.“
Q4 Outcome
In the fourth quarter of 2025, Walmart’s adjusted earnings increased to $0.66 per share from $0.60 per share in the year-ago quarter. Unadjusted net income was $5.25 billion or $0.65 per share in Q4, compared to $5.49 billion or $0.68 per share a year earlier. Sales increased to $178.8 billion in the January quarter from $171.91 billion in the corresponding period last year. Comparable store sales rose 4.6% for the company’s US business.
The higher import tariffs put pressure on retailers to lower prices, hurting margins. It is estimated that one-third of all products sold by Walmart in the US are imported, mainly from China and Mexico. Of late, consumers have generally been spending less on discretionary items and opting for lower-margin necessities like groceries to mitigate the impact of inflation, which in turn reduces retailers’ margins.
On Wednesday, Walmart’s stock opened at $98.55 and was trading slightly higher in the afternoon. It has gained 63% in the past twelve months.
