In a significant announcement on Thursday, Walmart has raised its full-year financial outlook, exceeding initial expectations. This upward revision comes after the retail powerhouse delivered fiscal second-quarter results that not only surpassed market estimates but showcased positive performance across all business segments. Walmart now projects adjusted earnings per share (EPS) to range between $2.35 and $2.43 for fiscal 2025, a marked increase from the original guidance of $2.23 to $2.37 per share.
Concurrently, the company's sales forecasts have been updated, now expecting growth in constant currency between 3.75% and 4.75%, compared to the earlier prediction of a 3% to 4% increase. This positive outlook indicates Walmart's resilience and adaptability in a competitive retail landscape. Back in May, the retail giant hinted that both adjusted EPS and sales would likely align at the upper end, or slightly exceed, their previous forecasts.
Analysts’ consensus, according to Capital IQ, predicts a normalized EPS of $2.42 alongside revenue expectations of $671.82 billion for the ongoing fiscal year. Following this optimistic update, shares of Walmart experienced an impressive uptick of 8% during premarket trading. Chief Financial Officer John Rainey expressed confidence about the upcoming months during an earnings call, stating, "Looking at the second half of the year, we expect the business to achieve sales growth in line with our financial framework and for sustained structural improvements in incremental margins." This indicates that Walmart anticipates operating income will increase at a rate slightly faster than its sales growth for the latter half of the fiscal year. In terms of fiscal performance for the July quarter, Walmart reported an adjusted EPS of $0.67, up from $0.61, thereby exceeding the market's expectations of $0.65.
Their total sales climbed by 4.7% to reach $167.77 billion, which also surpassed analysts' estimates of $167.38 billion. When considering total revenue, which encompasses membership and additional income sources, Walmart recorded a notable increase of 4.8%, bringing it to $169.34 billion. Comparable sales within the United States rose by 4.2%, exceeding the anticipated 3.5%, bolstered significantly by a remarkable 22% surge in e-commerce activity.
Additionally, same-store sales at Sam's Club increased by 5.2%, excluding fuel, with prominent contributions arising from food, health, and wellness sectors, alongside increases in transaction and unit volumes. The international segment of Walmart also saw a revenue climb, reaching $29.57 billion, up from nearly $27.6 billion year-over-year. Walmart’s gross margin saw an improvement of 43 basis points to 24.4%, credited to effective pricing strategies in the U.S.
and other factors highlighted in the earnings presentation. Operating, selling, general, and administrative expenses grew to $34.59 billion, increased from $32.47 billion year-on-year. Looking ahead to the current quarter, Walmart anticipates adjusted EPS to fall between $0.51 and $0.52, while the market expects a slightly higher figure of $0.55.
Additionally, sales growth is projected to rise by 3.25% to 4.25% when measured in constant currency. This optimistic picture speaks volumes about Walmart's strategy and execution as it navigates through today's dynamic market conditions..