Walmart reported a 7.3% increase in revenue to $177.8 billion for the first quarter of fiscal 2025, exceeding analyst expectations of $175 billion. The company's earnings per share came in at 66 cents. However, Walmart issued guidance for the current quarter that fell short of analyst expectations, and company executives noted signs of financial strain among lower-income consumers.
Financial Performance
Walmart's U.S. same-store sales grew 4.1% for the period from February through April. The company's online sales increased 24%, and membership fees contributed to overall growth.
Despite the revenue beat, Walmart's stock experienced a decline as its profit forecast for the full year came in below Wall Street estimates.
Consumer Behavior Trends
Income-Based Divergence
- Higher-income households: Walmart reported growth in patronage from households earning over $100,000. CEO John Furner stated that the majority of market share gains came from this demographic.
- Lower-income households: Households earning below $50,000 continue to face financial strain. CFO John David Rainey stated that these consumers are "more budget-conscious and perhaps navigating financial distress."
Gas Purchasing Patterns
Walmart reported that visitors to its gas stations have begun purchasing fewer than 10 gallons at a time for the first time since 2022. Rainey characterized this behavior as "an indication of stress."
Other retailers reported similar trends:
- Costco sold record amounts of gas between April and mid-May 2025, requiring multiple daily deliveries to meet demand.
- Murphy USA reported an increase in first-time shoppers and returning lapsed customers.
- Costco finance chief Gary Millerchip stated that members are increasing visit frequency to top up gas.
Economic Context
Inflation and Fuel Prices
- U.S. inflation reached 3.8% in April, influenced by energy costs.
- The average U.S. price for regular gas was $4.56 per gallon on Thursday, up from $2.98 before the regional conflict began.
- Diesel averaged $5.66, up approximately $2 since the start of the conflict.
- Federal data shows gas station spending surged 21% in April 2025 compared to the previous year.
- Consumer prices outpaced wage growth in April.
Tariffs and Refunds
- The U.S. government began refunding tariff payments after the Supreme Court struck down most of President Trump's tariffs.
- An analysis from the Federal Reserve Bank of New York indicated that consumers and businesses absorbed nearly 90% of tariff costs.
- Walmart executives announced plans to use tariff refunds to lower store prices. Rainey stated that the company sees the best return on capital by investing in lower prices for customers.
- Walmart's guidance does not assume any impact from IEEPA tariff refunds.
Tax Refunds
Rainey stated that higher tax refunds had muted some pressure from higher fuel prices, but as refunds taper, consumers will feel more pressure.
Other retailers, including Target, Home Depot, and Lowe's, also noted that larger tax refunds are offsetting some budget strain.
Industry Competition
Amazon Supersedes Walmart as Largest Company by Revenue
Amazon surpassed Walmart as the world's largest company by annual sales. Amazon reported $716.9 billion in revenue for the year ending December 2024. Walmart reported $713.2 billion in revenue for the year ending January 2025.
Amazon's revenue growth was significantly supported by:
- Amazon Web Services (AWS), which generated nearly $129 billion in sales
- Advertising and Prime subscriptions, which accumulated over $100 billion
- Online and physical store sales, as well as third-party seller revenue ($464 billion)
More than 90% of Walmart's sales are derived from its physical stores and websites. Walmart's stock value exceeded $1 trillion, making it the first traditional retailer to reach this milestone. The company moved its stock listing from the New York Stock Exchange to Nasdaq.
AI and Technology Investments
Walmart is investing in artificial intelligence through its own shopping assistant and retail technology. The company highlighted inventory and labor as its largest costs, with AI and technology expected to facilitate growth at a lower cost. Walmart previously announced plans to reduce 1,500 corporate jobs in a restructuring effort.
Future Outlook
Walmart executives expressed caution regarding future economic conditions, citing a hiring recession, lower consumer sentiment, and student loan delinquencies. Rainey stated that tariff-driven inflation is nearing its peak, a perspective that contrasts with recent comments from Amazon CEO Andy Jassy.
An ExxonMobil executive warned that prices could increase by an "order of magnitude" within weeks due to low global oil reserves. Executives at both Walmart and Costco indicated that higher gas prices are expected to lead to higher prices on store shelves.
Other Retailers
- Target reported net sales growth of over 6%.
- Home Depot, Dollar Tree, and Aldi also reported increased patronage from higher-income shoppers.
- Lowe's reported sales growth in the latest quarter.