Walmart's Q2 Earnings Miss, But Analysts Remain Bullish on Stock

Walmart (WMT) reported mixed Q2 earnings with adjusted EPS of $0.68, missing forecasts. Analyst Bill Kirk maintains a Buy rating and $108 target price, expecting an earnings upside in Q3. Kirk highlights Walmart's unique opportunities in automation, advertising, and consumer proposition. TipRanks AI analyst also has an Outperform rating and $108 price target, citing strong financial performance and strategic initiatives.

Walmart Inc. (WMT) reported its second-quarter (Q2) earnings on July 31, 2025, with adjusted earnings per share (EPS) of $0.68, missing analysts' expectations of $0.74 [2]. Despite the miss, the retail giant maintained a positive outlook, driven by strong performance in e-commerce and grocery sales.

Key highlights of the earnings report include:
- Revenue of $177.4 billion, up 8% year-over-year (YoY), or 5.6% in constant currency (cc) [2].
- Global e-commerce sales grew 25%, with a 26% increase in the U.S. driven by store-fulfilled pickup and delivery, and marketplace sales [2].
- Advertising revenue surged 46%, with Walmart Connect growing 31% in the U.S. [2].
- Comparable U.S. sales excluding fuel rose 4.6%, with strength in groceries, health and wellness, and general merchandise categories [2].
- Sam's Club comparable sales climbed 5.9%, above estimates [2].

Analyst Bill Kirk maintains a Buy rating and a $108 target price, expecting an earnings upside in the third quarter (Q3). He highlights Walmart's unique opportunities in automation, advertising, and consumer proposition [1]. Similarly, the TipRanks AI analyst has an Outperform rating and a $108 price target, citing strong financial performance and strategic initiatives [1].

Challenges faced by Walmart include:
- A 2% decrease in operating income, primarily due to discrete legal and restructuring costs, and a 560 bps headwind from increased self-insured general liability claims expense [2].
- Inventory increased 2% while maintaining healthy in-stock levels [2].
- The company incurred $450 million in legal-related costs tied to worker and shopper injury claims, along with restructuring charges and higher insurance costs [1].

Despite these headwinds, Walmart continues to outperform rivals. Target reported another quarterly sales decline, while Home Depot and Lowe's posted growth of about 1%. Amazon saw online sales climb 11% [1].

Looking ahead, Walmart expects net sales to rise between 3.75% and 4.75% for the fiscal year 2026, with adjusted EPS forecast at $2.52 to $2.62 [2].

References:
[1] https://www.ainvest.com/news/walmart-earnings-outshine-tariff-concerns-lifting-outlook-robust-spending-2508/
[2] https://licensinginternational.org/news/walmart-reports-second-quarter-results-2/