Walmart (NYSE: WMT) is set to report earnings this week, and that could create a nice buying opportunity for investors.
Walmart stock picked up a ton of momentum last year, surging from $52 per share to a high of $95. Some of that momentum carried into 2025, as well, as shares peaked over $105 per share in February.
However, tariffs, uncertainty, shaky growth, inflation, and the threat of recession took the wind right out of its sails.
Walmart last month maintained its expectation of 3%–4% sales growth for the first quarter, but said its "range of outcomes" for operating income had widened due to the aforementioned factors.
So it’ll be interesting to see how the nation’s largest retailer performed with respect to those challenges.
U.S. consumer confidence fell sharply in April, tumbling 7.9 points, to 86 — its lowest level since May 2020 (the height of the pandemic).
Did that have a significant impact on foot traffic and sales?
Did tariffs push prices out of reach for consumers already saddled with inflation fatigue?
Did higher costs for overseas products shrink the company’s margins?
These are all questions we’ll get answers to this week.
If Walmart fared better than expected, its shares could be in for a major upward revision. And if they disappoint… Well, then I’d say it’s a nice buying opportunity for Walmart stock.
And I’ll tell you why…
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What to Make of Walmart's Earnings
For one thing, President Trump is already walking back his tariff offensive.
Sobering market crashes have resulted in delayed deadlines and broad exemptions to soften the impact of the taxes. And yesterday, he announced a massive reset in his trade war with China.
That’s all reassuring. It suggests the administration is beginning to bandage this self-inflicted wound.
However, even with the tariffs, I think Walmart is well positioned to weather these economic storms due to its scale, supply chain advantages, product mix, and low-cost appeal.
Remember, key to Walmart’s success last year was that it made a lot of progress drawing wealthier shoppers to its stores — and especially its digital platform.
Some 89% of households earning at least $100,000 said they shopped at the retailer, according to a recent poll by Morning Consult. That’s up from 77% five years ago.
Furthermore, 36% of high-income respondents surveyed said they had a “very favorable” impression of Walmart, up from 27% in 2019.
Again, that’s partly because in this era of sky-high prices, wealthier shoppers have rediscovered the appeal of discounts. But it’s also because they’ve embraced Walmart’s online sales platform.
Indeed, Walmart’s fourth-quarter report in February showed 16% growth in global online sales. That’s roughly four times faster than its overall Q4 revenue growth rate. It’s also the 11th consecutive quarter in which Walmart online sales grew by double-digits.
Additionally, the Walmart+ program — which charges members $12.95 a month or $98 a year — now accounts for about 50% of the retailer's e-commerce revenue.
And Sam’s Club e-commerce sales grew 24%, including triple-digit growth in club-fulfilled delivery.
“Our prices are low, and we’re becoming more convenient,” said CEO Doug McMillon.
“Customers are shopping with us more often and buying more items, including in general merchandise categories, which were up low single digits in Walmart U.S. and Sam’s U.S. for the quarter.”
In light of this success, Walmart is set to spend another $1 billion this year to improve its website and mobile capabilities.
This is why I think Walmart is a buy no matter what its earnings say on Thursday.
The company has grown its revenue for 10 straight years by leveraging structural advantages of scale, staying true to its promise of low prices, and persistently expanding its digital operations.
I think Walmart’s earnings report will further reflect that and any weakness should be viewed as temporary.
Fight on,
Jason Simpkins
Simpkins is the founder and editor of Secret Stock Files, an investment service that focuses on companies with assets — tangible resources and products that can hold and appreciate in value. He covers mining companies, energy companies, defense contractors, dividend payers, commodities, staples, legacies and more…
In 2023 he joined The Wealth Advisory team as a defense market analyst where he reviews and recommends new military and government opportunities that come across his radar, especially those that spin-off healthy, growing income streams. For more on Jason, check out his editor’s page.
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