By Brooke DiPalma

Walmart (WMT) posted a mixed quarterly print on Wednesday morning.

As America's largest retailer navigates President Trump's tariffs, its Q1 revenue of $165.6 billion missed Wall Street expectations of $166.02 billion. Adjusted earnings per share grew 1.7% year over year to $0.61, beating estimates of $0.58. US same-store sales also beat expectations with a 4.5% increase, led by strength in health and wellness and groceries.

The 2.5% year over year jump in Q1 net sales from $161.51 billion is below the 3% to 4% range Walmart set at its investor day back in April. For the second quarter, it expects net sales to increase 3.5% to 4.5%.

"We will do our best to keep our prices as low as possible 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," CEO Doug McMillon said in the release.

The company did not provide guidance on operating income for the second quarter. CFO John David Rainey said the decision was "given the dynamic nature of the backdrop, and the range of near-term outcomes being exceedingly wide and difficult to predict."

For the full year, the company reiterated its conservative 2026 fiscal year guidance. It projects net sales to increase between 3% and 4%, in line with a target of 4% annual sales growth it laid out years ago.

Wall Street largely expected it to reiterate the range as "tariffs remain a wildcard for 2025 estimates for Walmart (and all of retail)," Telsey Advisory Group's Joe Feldman said in a note to clients. He added the retailer is expected to "weather the pressure better than most."

Prior to earnings, Walmart stock was up 7.3% year to date and up more than 4% in the last month as investors have sought out safe havens. That's compared to the S&P 500 (^GSPC) remaining flat year to date and a 30% drop for Target (TGT).

Walmart shares edged up 3% in pre-market trading.

Earnings breakdown

Here's what Walmart reported for its first quarter results versus Bloomberg consensus estimates:

Revenue: $165.6 billion versus $166.02 billion

Adjusted earnings per share: $0.61, versus $0.58

Walmart US same-store sales growth: 4.5%, versus 3.85%

• Foot traffic growth: 1.6%, versus 3.05%

• Ticket growth: 2.8%, versus 1.20%

• E-commerce sales growth: 21%, versus 2.12%

Sam's Club US same-store sales growth: 6.7%, versus 4.93%

This report could also be a key indicator for other retailers' results. Target, Home Depot (HD), and Lowe's (LOW) are all set to report next week.

Bank of America analyst Robert Ohmes said Walmart is "well positioned to manage tariffs given deep relationships with suppliers, advanced pricing, automation, & inventory management capabilities." He called the stock's high valuation "warranted."

Read more: What Trump's tariffs mean for the economy and your wallet

"Shares are still positioned for outperformance," Oppenheimer analyst Rupesh Parikh told clients in a note, with the potential for "continued grocery share gains, increasing contribution from alternative revenue streams, ongoing benefits from Walmart's e-commerce investments, and an improved international footprint."

Around 60% of Walmart's US sales are groceries, which are largely tariff-exempt. Ohmes estimates it imports roughly 15% of its US sales from China.

Feldman said the company could benefit from a cautious consumer backdrop as low-income consumers seek value items, while higher-income shoppers look for affordable premium products.

In Q1, Walmart's e-commerce business achieved its first full quarter of profitability, both in the U.S. and globally. E-commerce sales jumped 22%, compared to expectations of 13.85%.

Inventory will be a key metric to watch going forward, as retailers are expected to stockpile goods during the 90-day pause that drops Chinese tariffs from 145% to 30%. In the quarter, its inventory increased 3.8%, compared to estimates of 3.29%.

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Brooke DiPalma is a senior reporter for Yahoo Finance. Follow her on X at @BrookeDiPalma or email her at bdipalma@yahoofinance.com.

Source: Yahoo finance