Walmart's growth beyond store shelves fuels strong quarter
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Walmart's growth beyond its stores continued in the first quarter, driven by advertising, e-commerce and memberships.
Why it matters: The nation's largest retailer is increasingly making money from the services built around shopping — not just the products on its shelves.
Driving the news: Walmart reported first-quarter revenue of $177.8 billion Thursday, up 7.3% from a year ago, while adjusted earnings per share rose 8.2%, to 66 cents.
- Walmart U.S. comparable sales rose 4.1%, driven by higher customer traffic and increased unit volumes.
- Global e-commerce sales jumped 26%, fueled by store-fulfilled delivery, pickup and marketplace growth.
Yes, but: Higher fuel costs weighed on profitability.
- Walmart said it absorbed many of those costs while continuing to invest in lower prices and expand rollbacks.
- The company also issued second-quarter guidance calling for net sales growth of 4% to 5%, shy of analysts' expectations. Retail analyst Bruce Winder noted that Walmart's U.S. comparable sales growth was "slower than last year and recent trend," which "may concern investors a little."
Walmart shares were down more than 7% as of noon Thursday. The stock is up more than 25% over the past 12 months.
The big picture: Walmart continues to gain shoppers across income levels — not just consumers looking for lower prices.
- The retailer said it saw broad-based market share gains across categories and income tiers, led by upper-income households.
- General merchandise posted its highest level of share gains in five years, with strength in fashion and hardlines, while private-brand sales rose double digits during the quarter.
- Last month, Walmart announced a major redesign of its Great Value brand, one of the nation's largest grocery and household brands — bigger than many major food companies.
Zoom in: Walmart's global advertising business grew 37%, while Walmart Connect U.S. — which lets brands and sellers run ads across the company's retail ecosystem — rose 44% excluding Vizio, which Walmart acquired in 2024.
- Marketplace sales rose nearly 50% — Walmart's strongest marketplace performance in 10 quarters.
- Membership fee revenue grew 17.4% globally, while Walmart+ saw strong membership growth.
- CFO John David Rainey said advertising and memberships now account for roughly one-third of Walmart's earnings — "very different from Walmart of 10 years ago."
Between the lines: Walmart's fastest-growing businesses are increasingly tied to delivery, convenience and digital services.
- Executives said faster delivery speeds are driving customer engagement and more frequent purchases, with Walmart now able to reach roughly 60% of U.S. households in 30 minutes or less.
- Expedited deliveries completed in under three hours accounted for roughly 36% of Walmart U.S. store-fulfilled orders, while store-fulfilled delivery sales surged about 45% during the quarter. Marketplace growth topped 40% in hardlines, home and apparel.
- CEO John Furner said faster delivery is becoming "an engine of operating leverage, not just a better experience for customers and members."
What they're saying: "The pace of change is accelerating, and we're moving more quickly to realize the benefits of the business model we built," Furner said on the earnings call.
- Furner said Walmart is "scaling tech-powered businesses like advertising, marketplace, and fulfillment services and membership alongside our core retail operations."
Editor's note: This story was updated throughout with additional information throughout.
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