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Good morning investors!

During the ever important earnings season, we publish our “Earnings Recap” — an in-depth summary of the earnings reports for stocks that we cover on a regular basis.

It was a quieter week on the earnings front, but we did some important clarity on the consumer and tariff effects from some major retailers.

Here’s a look at the 4 names we are covering in this report:

• Monday 5/12: --

• Tuesday 5/13: --

• Wednesday 5/14: --

• Thursday 5/15: Walmart, Alibaba, and Deere & Co

• Friday 5/16: --

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Walmart (WMT)

Walmart $WMT ( ▲ 1.96% ) delivered a solid Q1 2026 with revenue slightly below expectations but earnings per share coming in ahead, driven by strong e-commerce growth and improving operational efficiency. U.S. comparable sales rose 4.8% while e-commerce surged 22% YoY, but profitability was under pressure as net income declined 12% and profit margins remained thin.

🔑 Key Points

• Revenue came in at $165.61B, just below estimates, but still up +3% YoY.

• EPS of $0.61 beat expectations by 5.17%, despite a 12% drop in net income to $4.5B.

• Walmart U.S. revenue grew +3% YoY to $112.2B, with strength in groceries, health, and private label goods.

• Operating income increased +4% YoY to $7.1B, while operating expenses rose +3% to $34.2B.

• Free cash flow improved significantly to $425M from a -$427M deficit in Q1 FY25.

👀 What You Need to Know

Walmart’s digital momentum continues to impress with e-commerce and advertising revenues growing +22% and +50% YoY, respectively. Membership income also jumped +15%, helping drive recurring revenue. However, investors may watch closely as profit margins remain tight at 2.71%, and rising expenses and tariff costs could continue to weigh on bottom-line growth. The company reaffirmed FY guidance, projecting 3.0% to 4.0% revenue growth and EPS between $2.50–$2.60, signaling confidence in execution despite tariff headwinds.

WMT shares are +5.6% so far this week.

Alibaba (BABA)

Alibaba $BABA ( ▼ 0.36% ) closed out fiscal 2025 with strong bottom-line growth and impressive expansion across its AI, cloud, and core commerce businesses. Revenue missed estimates by 1.3%, but earnings per share met expectations. Profitability rebounded sharply, fueled by operational efficiency and a leaner cost structure.

🔑 Key Points

• Revenue reached $32.58B, growing +6% YoY, but missed estimates by 1.3%.

• EPS of $1.73 was flat against expectations but marked a +24% YoY jump.

• Taobao/Tmall revenue rose +9% YoY to $14.0B, while commerce revenue climbed +22% to $4.6B.

• Operating income surged 93% YoY to $3.9B as expenses remained flat at $28.7B.

• Cloud intelligence revenue advanced +18% YoY to $4.2B, showing traction in enterprise AI adoption.

👀 What You Need to Know

Despite a 76% drop in free cash flow to due to heavy cloud infrastructure investments, Alibaba delivered a notable +1,203% YoY rebound in net income and a +36% YoY jump in adjusted EBITDA to $5.8B. Share buybacks hit $11.9B for the fiscal year, underlining management’s confidence. The company reaffirmed its focus on AI + Cloud as its long-term growth engine, a strategy that may position it well, but one that also demands patience as investments weigh on near-term cash generation.

BABA shares are +6.2% so far this week.

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Deere & Co (DE)

Deere & Co $DE ( ▲ 2.94% ) reported better-than-expected Q2 2025 results, posting a solid revenue and EPS beat, but YoY declines across key metrics underscore the broader industry slowdown. Net income fell 24%, and free cash flow was sharply lower, pointing to a more cautious landscape for agricultural and construction machinery.

🔑 Key Points

• Revenue came in at $12.76B, down 6% YoY, but beat estimates by +16.5%.

• EPS of $6.64 beat by +19.4%, despite declining 22% YoY.

• Production & Precision Ag revenue dropped 21% YoY to $5.2B, while Small Ag revenue fell 6% to $3.0B.

• Operating income was $2.3B (–26% YoY) on expenses of $10.4B (–14% YoY).

• Operating cash flow sank to $568M (–40% YoY) as lower shipments and rising inventory weighed on liquidity.

👀 What You Need to Know

Free cash flow was just $13M vs. $219M a year ago, but Deere was still able to repurchase $838M in shares during the first half of the year as it is navigating weaker end-market demand, particularly in large ag and construction equipment. The company reaffirmed FY revenue guidance, but reduced the high end of its FY net income range to $4.75B–$5.50B. Investors should expect continued pressure into H2 as global tariffs and softening ag demand remain key risks.

DE shares are +16.6% so far this week.

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Thank you, and until next time investors!

Mark & Chris

The Investor’s Edge

Disclosure

This is not investing advice. It is very important that you do your own research and make investments based on your own personal circumstances, preferences, goals and risk tolerance.