Why did WMT's Q2 2025 EPS exceed expectations?

Walmart's Q2 2025 EPS of $0.56 exceeded expectations by $0.03, resulting in an EPS surprise of 5.3%. This positive surprise indicates that the company's performance exceeded analysts' expectations. Walmart's EPS exceeded expectations due to several key factors:

1. Strong Online Business Performance: Walmart's online business saw a significant 16% increase in sales during Q4, which is a testament to the success of its e-commerce strategy. This growth in online sales contributes to higher revenues and can lead to better profitability, as evidenced by the company's record-breaking revenue of $680.985 billion in Q4.
2. Diversified Business Mix: Walmart's business mix is diversifying, with durable profit sources such as global advertising growing by 29%. This diversification helps to stabilize profits and can lead to better EPS performance, as the company is not overly reliant on any one product or service category.
3. Effective Pricing Strategy: Walmart's competitive pricing strategy has attracted a diverse customer base, including higher-income shoppers seeking value amid economic uncertainties. This strategy helps to maintain strong sales volumes and can lead to better EPS performance by maximizing revenue per customer.

In conclusion, Walmart's Q2 2025 EPS exceeded expectations due to strong online business performance, a diversified business mix, and an effective pricing strategy. These factors collectively contribute to the company's robust financial performance and higher EPS.