Walmart reported its Q2 earnings this week, with the report falling just short of Wall Street forecasts and sending WMT stock down. The retailer’s Q2 results showcased a 4.8% revenue growth to $177.4 billion, but missed EPS forecasts at $0.68 compared to estimates of $0.73. On a positive note, Walmart raised its annual guidance, reflecting strong sales momentum, particularly in groceries and e-commerce, despite tariff-related challenges.
WMT stock is down 4.35% on Thursday, with investors likely selling off following the missed earnings forecast. “With regards to our US pricing decisions, given tariff-related cost pressures, we’re doing what we said we would do,” CEO Doug McMillon said on the company’s earnings call. “We’re keeping our prices as low as we can for as long as we can… As it relates to what we’re experiencing with customers and members here in the US, their behavior has been generally consistent. We aren’t seeing dramatic shifts.”
WMT stock came under pressure after the results showed Walmart reported adjusted earnings per share of $0.68, below the $0.74 the Street had forecast. This was the first quarterly earnings miss since May 2022. However, Walmart’s CEO remains optimistic that 2025 will end strongly. “As we replenish inventory at post-tariff price levels, we’ve continued to see our costs increase each week, which we expect will continue into the third and fourth quarters,” McMillon added. “As we go through the quarter, we’ll be watching price gaps. We’ll be watching gross margins. We’ll be watching bottom-line profitability.”
Also Read: UBS Analysts Are Bullish on Microsoft (MSFT): Should You Invest?
Despite the earnings miss, analysts hold a generally positive outlook on Walmart, with price targets indicating potential growth. Most analysts label WMT stock a Buy or Overperform, with price targets ranging from $100 to $120. Additionally, WMT is trading near the top of its 52-week range and above its 200-day simple moving average. While the price forecasts remain higher, there is potential that Walmart stock has hit an upper resistance level.
