What Happened?
Shares of retail behemoth Walmart (NYSE:WMT) jumped 6.3% in the morning session after the company reported better-than-expected third-quarter results and raised its full-year financial outlook.
The retail giant posted strong sales and profits that surpassed Wall Street's forecasts, signaling confidence heading into the holiday season. Total revenue climbed 5.8% to $179.5 billion, while its adjusted earnings per share of $0.62 also beat estimates.
Another positive was the company's same-store sales, which rose 4.5% year-on-year, demonstrating healthy performance at its existing locations. The results showed Walmart successfully catered to budget-conscious consumers looking for value. In light of the strong quarter, Walmart increased its full-year profit projections. This stands in sharp contrast to peer Target, which lowered its guidance just a day prior, citing uneven consumer spending and a shift toward value-seeking behaviors that could possibly be benefitting Walmart.
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What Is The Market Telling Us
Walmart’s shares are not very volatile and have only had 2 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 9 months ago when the stock dropped 8.1% on the news that the company reported disappointing fourth quarter 2024 (fiscal 2025) financial results.
Revenue was in line with estimates, with same-store sales roughly meeting expectations. The top line growth outlook wasn't exciting, with management guiding for FY'26 sales growth of 3% to 4%, though it's hard to pile on the company given its massive revenue base. Operating income was expected to grow between 3.5% and 5.5. These margin pressures contributed to the poor earnings outlook, which fell sharply below Wall Street's estimates. In addition, Walmart's results are often seen as a barometer for the broader U.S. retail sector, and the underwhelming performance adds to concerns about the strength of consumer spending. Overall, this quarter could have been better.
Walmart is up 19.2% since the beginning of the year, and at $107.30 per share, it is trading close to its 52-week high of $109.03 from October 2025. Investors who bought $1,000 worth of Walmart’s shares 5 years ago would now be looking at an investment worth $2,143.
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