Walmart (WMT.US) released its results for the second quarter of 2025. Investors were left somewhat disappointed. The growth rate is underwhelming, valuation metrics are very high, and external risks to the company are mounting. The stock has dropped over 4%.
-
EPS: 0.68 vs. expected 0.73
-
Revenue: $177.4 billion vs. expected $175.9 billion
-
Sales growth: 4.8% vs. expected 4.21%
-
Gross margin: increased to 22.8% vs. expected 24.8%
-
Raised full-year sales growth guidance: from 3–4% to 3.75–4.75%
-
Operating costs: up 8% year-over-year
-
E-commerce sales: up 26%
The company’s Price-to-Earnings (P/E) ratio is currently near all-time highs at around 38, which is significantly above the industry standard.
Start investing today or test a free demo
Create account Try a demo Download mobile app Download mobile appThe Federal Reserve’s policy of maintaining interest rates and additional tariffs pushed by the new presidential administration pose serious threats to the company’s condition in the coming quarters.
Treasury Secretary Scott Bessent stated that “Walmart will be able to absorb some of the costs related to tariffs.” Naturally, this may raise concerns among stakeholders who are more interested in the company’s profits than in supporting the U.S. president’s policies. CEO Doug McMillon announced that despite Walmart’s efforts to avoid price increases, they are inevitable.
Chart outlook
Walmart’s shares are falling today after the quarterly results and are approaching the 100-day exponential moving average (gold line). Breaking this level could push the price down to around $96–97 per share. Despite solid sales, higher operating costs have reduced the company’s profitability, which did not sit well with investors, leading to selling pressure.
Source: xStation5
Walmart’s scale works in its favor. It is the largest distributor and employer in the U.S. This scale allows Walmart to absorb costs and negotiate deals impossible for competitors.
The company’s management communicates confidence to investors by raising guidance. However, investors remain cautious, penalizing the stock with a significant decline. The future direction for Walmart will be shaped by the upcoming meeting in Jackson Hole. The Fed’s interest rate policy will likely determine consumer strength in the coming quarters, directly impacting Walmart’s earnings.
This content has been created by XTB S.A. This service is provided by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, entered in the register of entrepreneurs of the National Court Register (Krajowy Rejestr Sądowy) conducted by District Court for the Capital City of Warsaw, XII Commercial Division of the National Court Register under KRS number 0000217580, REGON number 015803782 and Tax Identification Number (NIP) 527-24-43-955, with the fully paid up share capital in the amount of PLN 5.869.181,75. XTB S.A. conducts brokerage activities on the basis of the license granted by Polish Securities and Exchange Commission on 8th November 2005 No. DDM-M-4021-57-1/2005 and is supervised by Polish Supervision Authority.
