Walmart (WMT) stock jumps on earnings beat, strong eCommerce growth

Walmart (NYSE: WMT) reported its second-quarter earnings on Thursday, topping analyst expectations. The retail giant's shares jumped more than 7% at the open, with the company's strong earnings driven by robust eCommerce growth and improved margins.

Walmart posted adjusted earnings per share of $0.67, beating the analyst estimate of $0.64. Revenue for the quarter was $169.3 billion, exceeding the consensus estimate of $168.52 billion and representing a 4.8% increase year over year.

The company's global eCommerce sales grew 21%, led by store-fulfilled pickup and delivery services and marketplace growth. Walmart's consolidated gross margin rate improved by 43 basis points, primarily due to gains in Walmart U.S. and Walmart International segments.

The retailer's consolidated operating income increased by $0.6 billion, or 8.5%, benefiting from higher gross margins, growth in membership income, and reduced eCommerce losses.

"Each part of our business is growing – store and club sales are up, eCommerce is compounding as we layer on pickup and even faster growth in delivery as our speed improves," said Doug McMillon, President and CEO of Walmart. "Our newer businesses like marketplace, advertising, and membership, are also contributing, diversifying our profits and reinforcing the resilience of our business model.”

For the third quarter, Walmart expects earnings per share between $0.51 and $0.52, slightly below the analyst consensus of $0.54. However, the company raised its full-year fiscal 2025 outlook, projecting earnings per share in the range of $2.35 to $2.43, in line with the current analyst estimate of $2.43 and up from the previous guidance of $2.23 to $2.37.

Furthermore, consolidated net sales are now expected to increase by 3.75% to 4.75% for FY25, up from the prior forecasted range of Increase 3% to 4%.

In Q2, the company also reported a 2% reduction in global inventory, including a 2.6% decrease for Walmart U.S., indicating improved supply chain management.

Reacting to the report, analysts at Morgan Stanley said the results ticked all boxes. " The most important elements of the WMT story delivered in Q2'25: a) solid comp growth, which demonstrates WMT market share leadership from investments and its significance as a growing mega platform, and b) EBIT growth outpacing sales growth due to "core" and alternative profits," they wrote.

BMO Capital stated that WMT's F2Q25 was a solid beat, noting the company's accelerating US comps (both WMT U.S. and Sam's) and gross margin expansion. The firm maintained its Outperform rating and $80 target price on the stock.

Evercore ISI analysts wrote: "The stock appears likely to benefit from 2Q results which should provide some relief for WMT and peers amidst ongoing market angst with respect to Walmart’s core consumer."

Analysts at Truist stated: "WMT currently provides investors with a bastion of stability in a tougher environment."

Stifel said: "We think the result reflects ongoing share gains across most businesses, especially in the U.S. We think consensus estimates increase low-single-digits, with WMT shares up similarly."

By Sam Boughedda

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