Walmart Technical Analysis - Walmart Trading: 2025-08-22

Walmart stock fell 4.5% yesterday as earnings missed Wall Street estimates. The stock sold off despite 4.8% rise in Q2 sales to $177.4 billion which beat the consensus revenue estimate of $175.5 billion. Overall gross margins were about flat at 24.5% versus 24.4% last quarter, missing consensus estimates of 24.9%. On a constant-currency basis, revenues grew 5.6%, reflecting strong performance across all business segments. Walmart stock sold off despite reporting better results than rival Target. Walmart's comparable sales growth at stores open at least one year was 4.6% in Q2, up from 4.2% one year ago. Transactions rose 1.5%, down from 3.6% last year, while average ticket, or the amount spent per transaction, rose 3.1%, up from 0.6%. For comparison, Target reported a 1.9% comparable sales decline and an online sales growth of only 4.3% in the quarter. The retail and wholesale giant indicated the average ticket growth was partly due to inflation and passing along higher costs associated with tariffs, which increased Walmart's import costs, and the company would increase prices this summer as announced earlier to offset tariff-related costs. Walmart said it continued to see cost increases each week as inventory was replenished at post-tariff price levels and those costs will continue rising in the second half of the year. However, the company reported tariff impact wasn't as big as expected so far as Walmart has raised prices maybe 1% since the end of the first quarter. The company’s operating income decreased 8.2% year over year to $7.3 billion. The company cited tariffs as the primary challenge, as well as discrete legal and restructuring costs. Adjusted operating income is up 0.4% in current currency terms. Still, management raised its full-year guidance: sales guidance was increased to 3.75% to 4.75% growth from 3% to 4% prior forecast while operating income growth guidance was unchanged - up 3.5% to 5.5%. Higher than expected revenue growth and guidance is bullish for Walmart stock price while earnings miss is a downside risk.