Walmart raised full-year guidance early Tuesday after beating earnings and revenue estimates for its fiscal third quarter. Walmart stock rallied on Tuesday amid a flurry of price-target hikes
The Dow retail giant snatched record highs intraday, bucking an overall decline for the Dow Jones Industrial Average.
Walmart Earnings
Early Tuesday, Walmart reported Q3 adjusted earnings of 58 cents per share, up almost 14% year over year, on a 5.4% revenue gain, to $169.59 billion, an overall beat. Total same-store sales climbed 5.5% for the three months ending Oct. 31.
Earnings growth accelerated sequentially from a 9.2% gain in the second quarter, FactSet shows. Revenue growth quickened slightly from 4.8% in the prior quarter.
Analysts were expecting Walmart to post EPS of 53 cents on revenue of $167.773 billion, including total same-store sales growing around 4%.
The company boosted its full-year 2025 earnings outlook to between $2.42-$2.47, up from $2.35-$2.43. Going into the report, analysts had targeted full-year EPS of $2.45. Walmart's fiscal year ends in January. Walmart now expects net sales to grow 4.8%-5.1% for the full year vs. 3.75%-4.75% previously.
In Q3, general merchandise sales grew for the second quarter in a row after declines for 11 straight quarters. Sam's Club, Walmart's membership warehouse chain, reported gains in apparel and consumer electronics. Justin McAuliffe, a Gabelli Funds research analyst, called growth outside the grocery and household consumables aisles "the highlight of this quarter." Sales of general merchandise grew in the low single digits even as prices deflated by 4%, Walmart said.
Among other Q3 highlights, Walmart's global e-commerce sales surged 27%. Its global advertising sales grew 28%. U.S. membership income also grew double digits.
"In the U.S., in-store volumes grew, pickup from store grew faster, and delivery from store grew even faster than that," Walmart CEO Doug McMillon said in an earnings release.
The Dow retailer continues to transform from a traditional brick-and-mortar business model to a more inclusive "omnichannel" one, blurring the boundaries between physical stores and online sales.
On Tuesday, Walmart CFO John David Rainey told CNBC the holiday period is "off to a pretty good start."
Yet, he added, consumers are deferring purchases until they find a compelling deal, especially as they pay more for food. "They're focused on price and value," he said.
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Walmart Stock, Retail Stocks
Shares rallied 3% to 86.60 in Tuesday's stock market action. Walmart stock made a new high intraday. The Dow Jones retail stock has been riding well aloft the 50-day moving average since its Q2 beat-and-raise earnings gap-up in August.
Among other retail stocks, Lowe's stock slipped 4.6%. The home improvement retail chain topped Q3 earnings and revenue targets early Tuesday, but its same-store sales sagged.
Target and TJX are on deck early Wednesday. BJ's Wholesale Club follows early Thursday and Ross Stores late Thursday.
Costco next reports in December. Home Depot kicked off superstore retail earnings season with solid results last Tuesday.
IBD chose Home Depot and Costco for recent Stock of the Day columns, as they acted well near buy points. Home Depot stock continued to work on a 416.02 entry on Tuesday. Costco rose below a 923.83 entry.
Discount Retail Giants: Inflation And Trump Winners
Several discount retailers, including Walmart and Costco, turned into inflation winners. They benefited as consumers shifted to lower-cost groceries, household consumables and value deals in general. The latest consumer prices data point to lingering inflation.
Looking ahead, Donald Trump's Nov. 5 U.S. election win could spur these retail stocks further. Analysts call the president-elect's tariff proposals inflationary, while his tax cuts could boost consumer spending.
At least eight analysts raised price targets on Walmart stock on Tuesday after earnings, FactSet shows. No one cut. WMT stock now sits on a year-to-date gain of almost 65%.
