Key Highlights

  • Walmart shares are down 5.95% pre-market at $107.50, following Wednesday's modest 0.78% decline.
  • Fiscal second-quarter adjusted EPS of $0.81 beat the $0.74 estimate, and Revenue of $187.9 billion topped the $186.6 billion expected.
  • Global eCommerce sales grew 23%, and global Advertising revenue rose 38%, with Walmart US advertising also up 38%.
  • Fiscal third-quarter adjusted EPS guidance of $0.62 to $0.64 fell well below the $0.68 analysts expected, while full-year EPS guidance of $2.80 to $2.87 also fell short of the $2.90 consensus.

Walmart Falls on Guidance Despite Earnings Beat

Walmart (NASDAQ:WMT) shares are down 5.95% in pre-market trading on August 20, after the retailer beat fiscal second-quarter expectations but issued disappointing forward guidance that overshadowed the results. The company reported adjusted EPS of $0.81 versus $0.74 estimated and revenue of $187.9 billion versus $186.6 billion expected, driven by 23% eCommerce growth and a 38% jump in global advertising revenue.

Walmart is the world's largest retailer by revenue, operating a vast omnichannel network of supercenters, supermarkets, discount stores, and Sam's Club Warehouse clubs across the US and 19 other countries, complemented by major E-commerce platforms such as walmart.com, walmart.ca, and Flipkart. Headquartered in Bentonville, Arkansas, and founded by Sam Walton in 1962, the company operates through three primary segments, Walmart US, Walmart International, and Sam's Club, serving roughly 270 million customers weekly through over 10,750 stores worldwide.

Guidance Shortfall Overshadows Strong Quarter

Despite the beat, Walmart guided fiscal third-quarter adjusted EPS to just $0.62 to $0.64, well below the $0.68 analysts expected, while full-year EPS guidance of $2.80 to $2.87 also fell short of the $2.90 consensus and signaled Margin pressure and slowing near-term profitability despite raising full-year sales guidance. The company's product portfolio spans groceries, health and wellness, apparel, home goods, electronics, and automotive services, alongside a growing suite of ancillary businesses including financial services, digital payments, advertising, and private-label brands like Great Value and Equate.

The guidance shortfall comes even as peers TJX (NYSE:TJX) and Target (NYSE:TGT) posted strong results this week, and follows a run-up in Walmart shares heading into the print toward a roughly 40x valuation that left little room for disappointment on the outlook.

What This Means for Investors

With fiscal 2025 revenue of approximately $681 billion and about 2.1 million employees globally, Walmart continues to compete on its Everyday Low Price strategy while investing heavily in eCommerce and advertising. The scale of today's pullback relative to the underlying beat suggests the stock's elevated valuation left investors with little tolerance for guidance that implies margin pressure, meaning the path of near-term profitability, not the strength of this quarter's sales and eCommerce growth, will likely determine whether the selloff proves overdone or justified.