Walmart online sales far outpaced in-store revenue growth in the retailer’s Q1 of its fiscal 2026.
In Q1, Walmart’s total revenue grew 2.5% year over year, to nearly $165.61 billion from $161.51 billion. Meanwhile, Walmart ecommerce sales have grown more than 15% year over year in each of the last 10 quarters. Furthermore, Q1 marked the seventh time in the past 10 quarters that Walmart online sales grew more than 20% year over year.
It’s also the quarter that Walmart’s ecommerce business became profitable. Chief financial officer John David Rainey said that — broken down by segment — Walmart U.S. and Sam’s Club ecommerce were both profitable. Walmart’s international segment was “slightly unprofitable, but if you take all of those together, we had a profit for the quarter.”
“We feel great about how we’re driving ecommerce growth in a way that not only serves customers and members better, but reshapes our business model, resulting in a more profitable business with higher returns over time,” said CEO Doug McMillon on Walmart’s Q1 earnings call with investors.
Delivery speed is helping to drive that, McMillon stated. Walmart will soon be able to deliver to 95% of the U.S. population within three hours, he claimed.
“For Walmart U.S., the number of deliveries in less than three hours grew by 91% for Q1 versus a year ago,” McMillon said. “And in China and India, we’re frequently talking about delivery times that happen in minutes.”
Still, he said, Walmart’s immediate challenge is navigating the impact of tariffs in the U.S.
Walmart is No. 2 in the Top 2000. The database is Digital Commerce 360’s ranking of North America’s online retailers by their annual ecommerce sales. It is also No. 9 in the Global Online Marketplaces. That database ranks the top such marketplaces by third-party gross merchandise value (GMV).
Walmart is among the “Big Four” Mass Merchants that Digital Commerce 360 covers in depth as part of the newly published State of American Ecommerce Report.
How Walmart is responding to tariffs
McMillon said he was thankful for the “progress” the U.S. made on May 12, announcing a 90-day pause on tariffs that walks back increasing rates on products from China. He also added that Walmart is hopeful that will lead to a long-term agreement between the U.S. and China.
“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,” McMillon told investors. He later reiterated that “even at the reduced levels, the higher tariffs will result in higher prices.”
Although managing inventory is always important in retail, he said, “In this situation, it’s even more important and even more challenging.”
“In some cases, we’ll absorb costs within a category or department and not simply pass on a tariff cost attributable to each item individually,” he said.
He added that some Walmart suppliers are shifting materials from tariff-impacted components. For example, some suppliers will switch from aluminum to fiberglass, which currently does not have any tariffs.
McMillon noted aspects of Walmart’s operations that have helped it withstand tariffs’ impacts so far.
6 factors helping Walmart handle tariffs
- Well-managed inventory
- Crossing the threshold of global ecommerce profitability
- Higher-margin businesses growing, including membership and advertising
- Selling a broad assortment of products that include food, consumables and general merchandise
- Much of its assortment is “replenishable”
- More than two-thirds of what it sells in the U.S. is produced domestically
“We don’t have to make a one-time call on a quantity,” McMillon said. “Instead we can adjust a forecast and partner with our suppliers to adjust quantities over time as we navigate tariff impacts on costs.”
Still, merchandise Walmart imports comes from dozens of countries, including Canada, China, India, Mexico and Vietnam.
“China in particular represents a lot of volume in certain categories like electronics and toys,” McMillon said. “All of the tariffs create cost pressure for us, but the larger tariffs on China have the biggest impact. The cost pressure from all the tariff impacted markets started in late April and it accelerated in May.”
Walmart plans to keep its food and consumables’ pricing low, as its customers “have been feeling” the impacts of food prices increasing “in recent years.”
“We won’t let tariff related cost pressure on some general merchandise items put pressure on food prices,” McMillon said.
But food tariffs on Costa Rica, Peru and Colombia affect imported produce such as bananas, avocados and coffee.
Walmart online sales Q1
In Q1, Walmart online sales grew 22% globally year over year. Store-fulfilled pickup and delivery, as well as the Walmart marketplace, led that growth, the retailer said.
In the U.S., Walmart online sales grew 21% year over year in Q1. In addition to store-fulfilled orders and its marketplace, Walmart credited advertising and expedited delivery for its Q1 ecommerce sales growth. Also in the U.S., Walmart comparable store sales grew 4.5% year over year in Q1.
And internationally, Walmart ecommerce sales grew 20% in Q1. That compares to 7.8% growth for overall international Walmart sales in Q1. Internationally, Walmart increased the items for same- or next-day delivery by 35%. Moreover, it delivered about 45% of those items in three hours or less.
At Sam’s Club, ecommerce sales grew 27% year over year in Q1. Meanwhile, Sam’s Club comparable store sales grew 6.7% year over year in Q1, excluding fuel.
Walmart Connect and other revenue sources
Overall Walmart advertising increased 50% year over year in Q1, Rainey said. That includes Walmart ad revenue from Vizio.
Walmart Connect in the U.S. — which doesn’t include Vizio — grew 31%. Walmart Connect is the company’s retail media network unit.
Sam’s Club’s U.S. ad business grew 21% year over year in Q1. Meanwhile, Walmart international advertising grew 20%.
Membership fee income grew nearly 15% across Walmart’s brands. In the U.S., Rainey said, Sam’s Club steadily grew member counts, renewal rates and increased penetration of plus members. Sam’s Club grew membership income 9.6% in Q1. In China, specifically, Sam’s Club membership income grew more than 40% year over year.
At the same time, Walmart+ membership income “grew double-digits,” Rainey said without quantifying.
Walmart’s financial guidance for the rest of 2025
“We’ve seen during periods of economic uncertainty in the past, we tend to gain share and come out of the other side in an even stronger position,” Rainey told investors. “We expect this period to be no different.”
But Walmart is “not fully immune from the financial impacts in the short-term,” he said. Walmart has modeled “various scenarios related to the ongoing trade policy discussions,” he added. That involves making assumptions about how long tariffs persist at certain levels, as opposed to reducing once the U.S. completes trade deals.
“The range of possible outcomes is much greater than when we originally provided our annual guidance,” Rainey said. “That said, in what we believe are the most likely scenarios that we’ve modeled, we still have the ability to achieve our full-year guidance for both sales and operating income.”
“However, if we see a restoration of dramatically higher tariff levels, the impact on our financials could be significant and even jeopardize our ability to grow earnings year over year,” he added.
Check back for more earnings reports. See Walmart’s previous quarterly earnings story here.
Do you rank in our databases?
Submit your data and we’ll see where you fit in our next ranking update.
Sign up
Stay on top of the latest developments in the online retail industry. Sign up for a complimentary subscription to Digital Commerce 360 Retail News. Follow us on LinkedIn, X (formerly Twitter), Facebook and YouTube. Be the first to know when Digital Commerce 360 publishes news content.