Well, well, well. Look who decided to join the “oops, we missed earnings” club for the first time since 2022. That’s right, folks – Walmart, the retail giant that’s usually as reliable as your mom’s meatloaf recipe, just whiffed on Wall Street’s expectations.
Here’s the tea: Walmart reported adjusted earnings of 68 cents per share when analysts were expecting 73 cents. Doesn’t sound like much, but in the stock market, missing by a nickel is like showing up to a black-tie event in flip-flops – technically you’re there, but everyone’s going to notice.
The stock promptly threw a little tantrum, dropping 4% faster than your motivation on a Monday morning. But before we start planning Walmart’s funeral, let’s dig into what actually happened here.
The Good, The Bad, and The “Meh”
Revenue actually beat expectations at $177.4 billion (up 4.8% year-over-year), which is like getting an A+ on the test but failing the pop quiz. The earnings miss was mainly due to some boring insurance claim expenses that nobody saw coming – basically, Walmart got hit with unexpected bills like the rest of us when our car decides to break down right after the warranty expires.
But here’s where it gets interesting: people are still shopping. Traffic was up 1.5%, and – plot twist – they’re spending more per trip. The average ticket jumped 3.1%, which could mean two things: either people are buying fancier stuff, or everything just costs more now. Spoiler alert: it’s probably the latter.
Tariffs Are the New Villain
CEO Doug McMillon dropped some truth bombs on the earnings call, basically saying prices have been creeping up every week thanks to tariffs. It’s like watching your grocery bill slowly inflate while your paycheck stays the same – not exactly what you want to hear when you’re trying to stretch those dollars.
This is particularly ironic for Walmart, which built its empire on being the place where your money goes furthest. Now they’re getting squeezed by the same forces hitting everyone else, and even the discount king isn’t immune to economic reality.
Should You Panic?
Probably not. Walmart raised its guidance for the rest of the year, which is corporate speak for “we think things will get better.” The company is still expecting decent growth, and let’s be honest – people aren’t going to stop needing groceries and household essentials anytime soon.
The stock trades at a pretty hefty premium with a forward P/E of 39, so it’s not exactly a screaming bargain. Analysts still see about 13% upside with a median price target of $111, but this isn’t a “back up the truck” moment.
Bottom line: Walmart stumbled, but it’s more like tripping over a crack in the sidewalk than falling down a flight of stairs. If you own it, hold tight. If you don’t, maybe wait for a better entry point – because in this market, patience usually pays off better than panic buying.