Walmart’s eCommerce Growth Eases Tariff Pressure but Revenue Gains Slow
Company leans on U.S. supply base and digital sales to manage costs amid uncertain trade environment.
The Walmart logo is seen on the exterior of a Walmart store.
BENTONVILLE, Ark., May 16, 2025 — Walmart’s expanding eCommerce operations are helping the retail giant mitigate some of the cost pressures from tariffs and supply chain challenges, executives told analysts Thursday during the company’s fiscal first-quarter earnings call.
The company reported first-quarter revenue growth of 2.5% to $165.6 billion, below its earlier forecast of 3% to 4%, signaling a slowdown in sales momentum. Walmart expects second-quarter sales to rise 3.5% to 4.5%, while maintaining full-year guidance of 4% growth. However, Walmart declined to provide earnings guidance, citing the unpredictability of the economic and trade environment.
Walmart’s eCommerce sales climbed 21% in the quarter, driven by double-digit increases in store-fulfilled pickup and delivery orders, and a 31% surge in advertising revenue through Walmart Connect. Membership income rose 3.8%, with Walmart+ fees seeing double-digit growth. Comparable store sales increased 4.5%, led by gains in health, wellness, and grocery categories.
CEO Doug McMillon highlighted delivery speed as a key driver. “We’ll soon reach 95% of the U.S. population with delivery options of three hours or less. Deliveries in under three hours grew 91% year over year,” he said.
Tariffs remain a significant hurdle. Doug noted that more than two-thirds of Walmart’s merchandise is sourced domestically, yet tariff costs—especially on Chinese goods—are squeezing margins. “We will do our best to keep prices low, but we can’t absorb all the pressure given narrow retail margins,” he said. The company plans to manage these costs by adjusting product mix and absorbing some expenses within categories.
Chief Financial Officer John David Rainey said some categories, like electronics and sporting goods, showed softening sales. Meanwhile, Sam’s Club reported nearly 7% comparable sales growth, excluding fuel, with eCommerce sales up 27%, fueled by strong growth in club-fulfilled delivery and pickup.
John also noted digital adoption is accelerating, with over half of Sam’s Club members transacting digitally. The company achieved eCommerce profitability in the U.S. and globally for the first time this quarter. He credited improvements to last-mile delivery density and customers paying for faster shipping options.
Despite the challenges, Walmart remains cautiously optimistic. The company benefits from scale, a large U.S. supplier base, and growing membership, which supports repeat business. Rainey acknowledged the trade environment is volatile and difficult to forecast, with tariff-related price swings unprecedented in the company’s experience.
Walmart U.S. CEO John Furner described customers as “choiceful and consistent,” emphasizing ongoing demand for value and delivery speed across income levels.
Walmart’s shares fell 1.7% in early trading following the earnings announcement.
We have some room to absorb costs through eCommerce, membership, and advertising.
