By Sabrina Escobar

Walmart stock was rising in premarket trading Thursday after the retailer's earnings surpassed expectations.

For the quarter ended April, the discount chain reported adjusted earnings of 61 cents a share, topping analyst projections for 58 cents, according to FactSet.

Revenue rose 2.5% year over year to $165.6 billion, roughly in line with consensus estimates. U.S. same-store sales were up 4.5% from the year-ago quarter, better than projections for a 3.9% increase.

Walmart maintained its full-year outlook for net sales to increase between 3% and 4% from the prior year and for earnings per share to range from $2.50 to $2.60.

For the second quarter, Walmart sees sales increasing 3.5% to 4.5%. Analysts had penciled in a rise of 3.4%.

The company noted that its guidance was subject to "substantial uncertainty" stemming from changes in global economic and geopolitical conditions, tariff and trade policies, customer demand, and inflation. Notably, second-quarter guidance didn't include a specific range for income growth or earnings per share for the quarter.

"Given the dynamic nature of the backdrop, and the range of near-term outcomes being exceedingly wide and difficult to predict, we felt it best to hold from providing a specific range of guidance for operating income growth and EPS for the second quarter," said John David Rainey, Walmart's chief financial officer. "With a longer view into the full year, we believe we can navigate well and achieve our full year guidance."

Shares of Walmart were up 2.9% to $99.37 in premarket trading Thursday.

Walmart has scheduled a call to discuss its results for 8 a.m. Eastern time. Investors will be listening for more details on how the company is tackling tariffs and whether it has seen any changes in consumer demand.

New tariffs have gone into effect since Walmart's last quarter , including a 10% baseline tariff on most imports and higher ones on certain products from Canada and Mexico.

Chinese imports had been subject to a 145% levy until a temporary agreement with the Trump administration was reached on Monday, though the rate is still higher -- at 30%.

And while that is a more manageable number, it is still hefty enough to threaten profit margins. Consequently, tariffs will remain top of mind for both investors and C-suite executives.

Imported goods -- the bulk from China and Mexico -- accounted for roughly a third of Walmart's U.S. sales last year, but Wall Street is confident Walmart is well positioned to navigate tariffs for a host of reasons.

Robert Ohmes, an analyst at BofA Securities, points to the company's mammoth size, close relationships with suppliers, automation efforts, growing third-party marketplace, and alternative revenue streams such as advertising. And most of its grocery products are sourced domestically.

Still, Walmart isn't entirely immune to trade policy shifts. At its investor day in April, management said the company had various strategies to offset tariffs, including sourcing more products from the U.S.

Investors, though, want more details on how Walmart plans to manage pricing: Will the company hike some prices to preserve margins? Will it take the profit hit to keep prices lower than competitors?

Rainey said at the investor day that the company saw "opportunities to accelerate share gains," so was going to maintain flexibility to invest in pricing.

Write to Sabrina Escobar at sabrina.escobar@barrons.com

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May 15, 2025 07:28 ET (11:28 GMT)

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