Walmart said it would not be able to fully shield customers from the impact of the Trump administration’s tariffs after recording a slip in first-quarter profit despite posting strong quarterly sales and a bump in operating profit Thursday, The Associated Press (AP) reported.
Walmart released its first quarter (Q1) earnings Thursday for its 2026 fiscal year that ended April 30. The retailer’s reported operating profit rose to $7.1 billion in Q1 2026, up from $6.8 billion in the same period in 2025. However, its earnings per share of 56 cents in Q1 2026 was less by 11.1% than the 63 cents it earned per share in Q1 2025, according to the release.
The retailer thus earned $4.45 billion in the first quarter of 2026, less by $650 million than the $5.1 billion that it earned in the same period in 2025, according to the AP.
The company’s shares slipped 4% at the start of trade Thursday, the outlet reported.
Walmart posted strong quarterly sales, with its global online sales having grown by 22% and physical and online sales within the U.S., up 4.5%, according to the retailer’s release. It recorded “strong growth in health & wellness and grocery.”
Walmart sources two-thirds of its merchandise from within the U.S., with its groceries making up about 60% of the retailer’s business, according to the AP. Yet, the company argues it only helps partially to buffer against potential fallout from the Trump administration’s tariffs.
“We will do our best to keep our prices as low as possible,” Walmart’s CEO Doug McMillon told industry analysts Thursday, according to the AP. “But given the magnitude of the tariffs, even at the reduced levels announced this week, we aren’t able to absorb all the pressure given the reality of narrow retail margins.”
Walmart’s reported revenue for the first quarter of 2026 rose to $165.61 billion — up from $161.5 billion in the same period in 2025, the release shows. Nonetheless, the Q1 2026 revenue fell short of estimates by analysts, the AP reported.
Walmart said its net sales for the second quarter could rise by 3.5%–4.5%. It, however, did not predict its profits for the second quarter because of the U.S.’s constantly changing tariff policies, the AP reported.
Consumers have grown wary of spending and Walmart’s low-price model faces uncertainty amid the current tariff climate, according to the company. Retailers and importers stopped importing items such as shoes, clothes, and toys because of the high import duties driven by the U.S. government’s threat to impose 145% import taxes on Chinese goods and other tariff hikes on goods from other countries, according to the AP. (RELATED: Chinese Manufacturers Flood Social Media With Anti-Tariff Videos)
Many are reportedly trying to exploit a deal that saw the U.S. reduce its tariff on Chinese goods from 145% to 30% and hit a 90-day pause on some of the higher tariffs to resume importing from China and forestall possible scarcity in the fall.