Walmart Inc. surpassed Wall Street's revenue and earnings expectations for its second quarter, yet a more reserved forward-looking guidance cast a shadow over the results, causing its stock to slide in pre-market trading. The retail giant announced revenue of $187.9 billion, a 5.9% increase year-over-year, exceeding the consensus estimate of $186.8 billion. Adjusted earnings per share (EPS) came in at $0.81, comfortably above the $0.74 anticipated by analysts.
Despite these strong top-line and bottom-line figures, investors reacted negatively to Walmart's outlook for the third quarter and the full fiscal year. For the current quarter ending in October, Walmart projects EPS between $0.62 and $0.64, falling short of the $0.69 consensus estimate. The company also revised its full-year EPS guidance to a range of $2.80 to $2.87, which is below the previously expected $2.90. This more conservative forecast appears to have outweighed the positive quarterly results.
Comparable sales in U. S. stores, a key metric for retail performance, rose 2.6%, missing the consensus estimate of 3.7% and showing a slowdown from the 4.1% growth in the first quarter. However, global e-commerce sales continued their robust expansion, increasing by 23%, with U. S. online sales growing approximately 24%. The company's advertising business also demonstrated strength, with global revenue up 38%. These digital growth areas highlight Walmart's strategic focus on omnichannel retail.
The company benefited from nearly $2.9 billion in tariff refunds, which were prioritized for investment in pricing, according to management. While these refunds contributed to profitability, the market appears to be scrutinizing the sustainability of earnings growth beyond these one-time benefits. Walmart's ability to maintain market share, particularly among higher-income households, and manage operating expenses will be critical as it navigates a dynamic economic environment.
