Walmart (WMT) Q2 2025 Earnings

Walmart raised its outlook for the year on Thursday as quarterly revenue grew nearly 5%, the company’s stores and website drew more visits and sales outside the grocery department improved.

The discount chain beat Wall Street expectations for sales and profit, sending its shares up 6% in morning trading.

Walmart said it now expects sales to rise between 3.75% and 4.75% for the full year and adjusted earnings to be between $2.35 and $2.43 per share. It previously said it expected to be at the high end or slightly above its initial full-year guidance, which called for net sales growth of 3% to 4% and adjusted earnings per share of between $2.23 and $2.37.

While Walmart raised its forecast, its projected second half of the year may not be as strong as Wall Street anticipated. The retailer expects adjusted earnings of 51 cents to 52 cents per share in the third quarter, below analysts’ expectations of 54 cents. Analysts also expected adjusted earnings of $2.43 per share for the year, the high end of Walmart’s forecast.

In an interview with CNBC, Chief Financial Officer John David Rainey said the company’s brighter outlook reflects strength in the first half of the year. He said Walmart decided not to raise expectations for the second half of the year, especially as the 2024 election, unrest in the Middle East and other dynamics may weigh on consumer confidence.

“In this environment, it is responsible or prudent to be a little cautious about the outlook, but we are not projecting a recession,” he said.

He said Walmart hasn’t noticed a change in consumer behavior. He said all months of the quarter were “relatively consistent” and that the back-to-school season “has started off pretty well.”

“We see our members and customers continuing to be selective, discerning, value-seeking and focused on essentials rather than discretionary items, but more importantly, we are not seeing any further deterioration in consumer health,” Rainey said.

Walmart saw another promising indicator: Sales of general merchandise, such as lawn and garden supplies, were positive for the first time in 11 quarters. It said those sales rose only slightly, but were an “encouraging sign for us.”

Here’s what the discount chain reported for the fiscal second quarter compared with what Wall Street expected, according to a survey of analysts by LSEG:

• Earnings per share: 67 cents adjusted compared to the expected 65 cents
• Revenue: $169.34 billion vs. $168.63 billion

Walmart’s net income fell to $4.5 billion, or 56 cents per share, in the three-month period ended July 31. compared with $7.89 billion, or 97 cents per share, in the same period a year ago.

Revenue increased from $161.63 billion in the same quarter last year.

Walmart US comparable sales rose 4.2% in the second quarter, excluding fuel, compared with the same period a year earlier, which beat analysts’ expectations. The industry metric includes sales at stores and clubs open for at least a year.

At Sam’s Club, comparable sales increased 5.2%, excluding fuel, in line with analysts’ expectations.

E-commerce sales increased 21% globally and 22% in the US.

Walmart customers in the United States visited the company’s stores and website more and spent slightly more during the quarter than in the same period a year earlier. Transactions increased 3.6% and the average checkout increased 0.6% compared with the same quarter a year ago.

Walmart provided the latest window into the health of American households and the outlook for the broader economy as investors and economists seek clarity.

As the nation’s largest retailer, Walmart is uniquely positioned to offer insight into where consumers spend and save. The company’s reputation for value has boosted sales over the past two years as inflation has drawn more higher-income shoppers to its stores and website.

Inflation has moderated and returned to historic levels, according to July data from the U.S. Department of Labor. The consumer price index, which measures prices for a broad mix of goods and services, rose 2.9%.% Last month, compared to the previous year, this was the lowest level since March 2021.

During the election campaign, many politicians, including presidential candidates Kamala Harris, Vice President and former President Donald Trump, have spoken about how they will deal with rising prices for everyday products, including groceries. Harris, in particular, has blamed businesses for “price gouging.”

Walmart, for its part, said it is putting pressure on retailers to reduce prices. Rainey said that has long been a priority for the company.

He told CNBC that inflation was flat for Walmart year over year, so its sales growth was driven by selling more units rather than higher prices. He said it had 7,200 “reversals,” or short-term deals on items, in the quarter, including a 35% increase in the number of reversals on food.

However, prices are well above pre-pandemic levels, frustrating and testing consumers. A jobs report from the Labor Department earlier this month also raised concerns and triggered a sharp sell-off in the stock market as job growth slowed and the unemployment rate rose more than expected.

Earnings reports from some companies have raised concerns about the economy. House deposit On Tuesday, it beat quarterly profit and revenue expectations but warned of slow sales in the second half of the year and consumer caution, even among its middle- and upper-income customer base.

In addition to appealing to shoppers tired of inflation, Walmart has taken its own steps to boost growth. It has looked beyond traditional retail channels, as it has sought to add more sellers to its third-party marketplace, sell more ads and attract more members to its subscription service, Walmart+. It also launched a new grocery brand, Bettergoods, with most items under $5, including meal solutions like frozen pizzas and chicken wings.

Rainey said Walmart is likely benefiting as customers seek cheaper alternatives to fast food. He pointed to inflation data, which was released this week and showed the price gap between eating at home and eating out continues to grow.

“It makes sense that customers are choosing to prepare more meals at home rather than eating out,” he said.

Walmart shares closed Wednesday at $68.66. Year-to-date, the company’s stock is up nearly 31%, outpacing the S&P 500’s gains of about 14%.