Walmart Inc. (WMT) shares experienced a significant surge in pre-market trading on Thursday following the company’s release of strong second-quarter 2025 results. The retailer not only exceeded analysts’ expectations but also raised its full-year guidance, signaling positive momentum for the coming quarters.
The company reported adjusted earnings per share (EPS) of $0.67, representing a 9.8% year-over-year increase and surpassing the consensus estimate of $0.64. Revenue also climbed to $169.34 billion, marking a 4.8% year-over-year growth or 5.0% at constant currency, exceeding the consensus forecast of $168.57 billion. Notably, the gross margin rate expanded by 43 basis points, fueled by improvements across both Walmart U.S. and Walmart International segments.
The positive financial performance was underpinned by robust operational efficiency. Operating income saw a notable increase of $0.6 billion, translating to an 8.5% year-over-year rise. Adjusted operating income also witnessed a 7.2% year-over-year growth, driven by the combined impact of higher gross margins, expansion in membership income, and a reduction in eCommerce losses.
Walmart’s global eCommerce sales demonstrated strong growth, surging by 21%. This growth was primarily attributed to the rise in store-fulfilled pickup and delivery services, alongside the expansion of the company’s marketplace platform. The global advertising business also experienced a notable expansion, registering a 26% increase, including a 30% growth for Walmart Connect in the U.S.
Within the U.S. market, Walmart’s same-store sales (excluding fuel) climbed by 4.2% year-over-year, driven by a rise in transaction counts and unit volumes across both stores and eCommerce channels. Sam’s Club, Walmart’s membership-based warehouse club, also witnessed impressive performance, with same-store sales (excluding fuel) rising by 5.2% year-over-year. This growth was largely attributed to strong performance in food and health and wellness categories, accompanied by increased transactions and unit volumes.
Doug McMillon, President and CEO of Walmart, expressed his optimism regarding the company’s performance, highlighting the contribution of newer businesses such as marketplace, advertising, and membership in diversifying profits and reinforcing the resilience of Walmart’s business model.
In the six months ending July 31, 2024, Walmart generated an operating cash flow of $16.4 billion and free cash flow of $5.9 billion. The company ended the quarter with cash and equivalents of $8.8 billion, signifying a strong financial position.
Looking ahead, Walmart provided its guidance for the third quarter and the full fiscal year 2025. For the third quarter, the company expects adjusted EPS to range between $0.51 and $0.52, compared to the consensus estimate of $0.55. Sales are projected to fall between $164.58 billion and $166.17 billion, while the consensus estimate stands at $167.11 billion.
For the full fiscal year 2025, Walmart raised its adjusted EPS outlook to $2.35-$2.43, surpassing the previous guidance of $2.23-$2.37 and exceeding the consensus estimate of $2.43. The company also boosted its FY25 net sales (at constant currency) growth guidance to 3.75%-4.75%, up from the previous range of 3.0%-4.0%.
In a separate announcement, Walmart disclosed that Bob Moritz, retired Chairperson of PricewaterhouseCoopers (PwC), has joined the company’s Board of Directors, effective immediately.
As a result of the strong earnings report and raised guidance, WMT shares surged by 6.61% to $73.20 in pre-market trading on Thursday.
