Walmart Stock Heads for Worst Week in Four Years Despite Earnings Beat

Walmart shares are on track for their steepest weekly decline in more than four years, even after the retailer posted stronger-than-expected fiscal second-quarter results and raised its full-year outlook. Investors instead focused on slowing sales growth and softer forward guidance.

Strong Earnings, Weaker Outlook

Walmart reported second quarter revenue of $187.9 billion and earnings of $0.81 per share, both above analyst expectations. However, comparable sales growth slowed to 2.6% from 4.1% in the prior quarter, while transaction growth eased to 1.5%, raising concerns about consumer demand. The company’s third-quarter earnings guidance of $0.62 to $0.64 per share also came in below Wall Street’s $0.68 estimate.

Tariff Refund Boosts Margins, But Raises Questions

Gross margin improved to 25.4%, aided by a $2.9 billion tariff refund tied to the International Emergency Economic Powers Act. Since that benefit is temporary, investors are watching closely for how margins hold up once it fades. Meanwhile, Walmart’s e-commerce sales grew 23%, advertising revenue rose 38%, and membership income increased 17%.

Retail Traders Split on Buying the Dip

A Stocktwits poll found retail investors divided, with half open to buying the decline and the rest choosing caution. Despite the stock drop, sentiment on the platform shifted to “extremely bullish.”