Walmart earnings and guidance impress, helping lead Dow Jones higher
- Walmart stock jumps on top, bottom line beats.
- Revenue rises 5% from one year ago as ecommerce sales expand.
- Management does not expect an impending US recession of any kind.
- Fiscal 2025 guidance is raised across the board as WMT reaches new all-time high.
Walmart (WMT) held nothing back in the results released on Thursday morning, handily beating Wall Street consensus and raising its fiscal year 2025 guidance. WMT shares rose 6.5% to an all-time high above $73 per share.
The Dow Jones index jumped 1.2% at Thursday’s open, aided by Walmart and the previous day’s Cisco Systems (CSCO) results. US Retail Sales also helped out the index and market as large with a 1% MoM rise in July compared with consensus for 0.3%.
The S&P 500 rose 1.4%, while the NASDAQ climbed 2%.
Dow Jones lurches higher after Retail Sales data beat
Walmart stock earnings news
Walmart reported second-quarter adjusted earnings per share (EPS) of $0.67, which was 2 cents ahead of consensus. Revenue of $169.3 billion in the quarter ending in July rose nearly 5% YoY and beat consensus by a little less than $2 billion.
Management said that customers looked healthy and denied worries that a US recession is in the cards. This opinion appeared to be backed up by the higher US Retail Sales data that was released nearly simultaneously from the US Census Bureau.
Besides the headline quarter beat, shareholders took additional sustenance from the fact that Global eCommerce division sales climbed 21% YoY as losses narrowed.
For the current fiscal year ending in January 2025, management expects net sales to grow about 4.25% YoY at the midpoints and for adjusted operating income to grow a little over 7%. Both of these projects were slightly above past statements from management.
"We expect automation tech & AI to continue to play integral roles. WMT's strength continues, and with this improved consistency, as well as scaling of higher-margin rev streams, we believe a higher multiple is warranted," Jefferies analyst Corey Tarlowe wrote.
Morgan Stanley analyst Simeon Gutman praised Walmart for its comparable sales figures amid the competitive retail market. US comparable sales grew 4.2% YoY in the second quarter.
Walmart fiscal 2025 Q2 earnings call presentation
Dow Jones FAQs
The Dow Jones Industrial Average, one of the oldest stock market indices in the world, is compiled of the 30 most traded stocks in the US. The index is price-weighted rather than weighted by capitalization. It is calculated by summing the prices of the constituent stocks and dividing them by a factor, currently 0.152. The index was founded by Charles Dow, who also founded the Wall Street Journal. In later years it has been criticized for not being broadly representative enough because it only tracks 30 conglomerates, unlike broader indices such as the S&P 500.
Many different factors drive the Dow Jones Industrial Average (DJIA). The aggregate performance of the component companies revealed in quarterly company earnings reports is the main one. US and global macroeconomic data also contributes as it impacts on investor sentiment. The level of interest rates, set by the Federal Reserve (Fed), also influences the DJIA as it affects the cost of credit, on which many corporations are heavily reliant. Therefore, inflation can be a major driver as well as other metrics which impact the Fed decisions.
Dow Theory is a method for identifying the primary trend of the stock market developed by Charles Dow. A key step is to compare the direction of the Dow Jones Industrial Average (DJIA) and the Dow Jones Transportation Average (DJTA) and only follow trends where both are moving in the same direction. Volume is a confirmatory criteria. The theory uses elements of peak and trough analysis. Dow’s theory posits three trend phases: accumulation, when smart money starts buying or selling; public participation, when the wider public joins in; and distribution, when the smart money exits.
There are a number of ways to trade the DJIA. One is to use ETFs which allow investors to trade the DJIA as a single security, rather than having to buy shares in all 30 constituent companies. A leading example is the SPDR Dow Jones Industrial Average ETF (DIA). DJIA futures contracts enable traders to speculate on the future value of the index and Options provide the right, but not the obligation, to buy or sell the index at a predetermined price in the future. Mutual funds enable investors to buy a share of a diversified portfolio of DJIA stocks thus providing exposure to the overall index.
Walmart stock chart
Walmart stock had recently been wading beneath both the 50-day Simple Moving Average (SMA) and its 20-day counterpart before soaring above that level on Thursday.
The new all-time high was reached at $74.43, which is above the 1 threshold on the Fibonacci extension. Now bulls will pull for 161.8% Fib at $78.27.
Support sits near $71.20 from prior resistance on July 18 through July 22.
Walmart (WMT) daily stock chart
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Author
Clay Webster
FXStreet
Clay Webster grew up in the US outside Buffalo, New York and Lancaster, Pennsylvania. He began investing after college following the 2008 financial crisis.
