To The Moon

$Wal-Mart(WMT)$'s upcoming fiscal Q3 2026 earnings report, scheduled for release on Thursday, November 20, 2025.

The general sentiment heading into the report is one of steady momentum driven by its value proposition, e-commerce strength, and growth in higher-margin businesses, despite ongoing economic headwinds like tariffs and cautious consumer spending.

Q3 2026 Earnings Expectations

Here is a summary of the consensus analyst expectations:

Positive Tailwinds: Strength in grocery, e-commerce, advertising (Walmart Connect), and membership (Walmart+) are expected to drive growth. The recent acquisition of VIZIO is also expected to provide a modest boost to net sales.

Headwinds/Risk Factors: Investors will be watching for the impact of higher costs due to tariffs, elevated self-insured general liability claims expenses, and any further moderation in discretionary spending, particularly among middle- and lower-income households.

For the second quarter of fiscal year 2026, Walmart reported strong top-line revenue growth of 4.8% to $177.4 billion, or 5.6% on a constant-currency basis, driven by robust global e-commerce growth of 25% and significant sales gains in the U.S. and key international markets.

While GAAP earnings per share (EPS) increased significantly, adjusted EPS missed analyst estimates, and operating income was pressured by higher-than-expected expenses from legal claims. Despite these headwinds, the company raised its full-year sales and adjusted EPS guidance, signaling confidence in its strategy and ability to navigate cost pressures. 

Summary of Q2 FY26 performance

Revenue: Total revenue grew to $177.4 billion, a 4.8% increase year-over-year. Strong growth was seen across all business segments, with particularly strong performance in the U.S. and key international markets like China, Walmex, and Flipkart.

E-commerce: Global e-commerce sales surged 25%, indicating strong digital momentum and the success of the company's omnichannel strategy, which includes store-fulfilled pickup and delivery.

Earnings: GAAP EPS was $0.88, while the adjusted EPS was $0.68, which missed analyst expectations of $0.74. The miss was attributed to a $450 million increase in expenses from legal claims.

Operating Income: Reported operating income declined 8.2%, but adjusted operating income grew 0.4% on a constant currency basis, tempered by higher claims expenses in the U.S..

Higher-Margin Businesses: The company continued to see strong growth in higher-margin areas like advertising (up 46% globally) and membership fees (up 15% globally). 

Lesson learned from guidance

The updated guidance reveals several key lessons regarding Walmart's strategy and the broader retail environment: 

• Balancing Top-line Growth with Profitability: The guidance shows Walmart's focus on maintaining top-line sales momentum, even if it pressures margins temporarily. The company raised its full-year sales outlook while keeping its operating income guidance unchanged, reflecting the impact of higher costs.

• Strategic Investment in Higher-Margin Areas: The continued strong growth in e-commerce, advertising, and membership income highlights the importance of these higher-margin businesses in diversifying Walmart's revenue streams and improving overall profitability.

• Resilience Amid Cost Pressures: Despite facing tariff-related cost pressures and higher legal claims, Walmart's ability to maintain its full-year adjusted operating income guidance demonstrates its operational discipline. It's navigating these headwinds by managing pricing, merchandise mix, and operational costs.

• Cautious Consumer Outlook: The guidance implicitly acknowledges a cautious consumer environment. While customer spending has been resilient, the earnings call indicated that middle- and lower-income households are sensitive to price increases, particularly in discretionary categories. Walmart's focus on value and rollbacks is crucial for maintaining customer traffic.

• Long-Term Focus on Technology and AI: Management emphasized its long-term strategy of investing in technology and AI to improve efficiency and customer experience. The appointment of an executive focused on AI acceleration shows the company's commitment to leveraging technology for future growth.

Key Metrics Investors Should Watch

The headline EPS and Revenue numbers are crucial, but these underlying metrics will provide a deeper understanding of Walmart's health and future trajectory:

1. Comparable Store Sales (Comps)

This is the most critical metric for the core retail business, indicating organic demand from existing stores and digital channels.

Walmart U.S. Comps (Without Fuel): Analysts expect growth of year-over-year. Beating this number would signal continued market share gains, especially with lower- and higher-income consumers seeking value.

Sam's Club Comps (Without Fuel): Expected growth is also . Strength here indicates success with its membership model.

2. E-commerce Growth

Walmart's digital transformation is a primary driver of the stock's premium valuation.

Global E-commerce Net Sales Growth: Last quarter's growth was year-over-year, and investors will look for sustained, strong double-digit growth, especially in the U.S.

Source of Digital Growth: Look for commentary on the strength of the marketplace and the efficiency of store-fulfilled delivery and pickup operations.

3. Higher-Margin Businesses

These segments are crucial for margin expansion and justifying the stock's current valuation premium.

Walmart Connect (Advertising): Advertising revenue grew globally last quarter. Continued high growth is expected to provide a significant, high-margin profit cushion.

Membership Income (Walmart+ and Sam's Club): Strong growth in membership fees (which grew last quarter) signals higher customer loyalty and recurring revenue.

4. Profitability and Margins

Investors will scrutinize how Walmart is managing cost pressures.

Operating Income / Adjusted Operating Income: How is the company balancing strong sales growth with higher costs (tariffs, claims expenses, etc.)? A beat on the bottom line is often due to better-than-expected margin control.

Gross Margin: This will reflect the true cost of goods sold, which is under pressure from tariffs and an ongoing need to offer competitive, low prices.

Walmart (WMT) Price Target

Based on 39 analysts from Tiger Brokers app offering 12 month price targets for Walmart in the last 3 months. The average price target is $113.67 with a high forecast of $129.00 and a low forecast of $67.21. The average price target represents a 12.11% change from the last price of $101.39

Opportunity for Short-Term Trading Post-Earnings?

Walmart's stock is generally less volatile than smaller-cap stocks, but earnings often provide a short-term catalyst.

Implied Volatility: Options markets are currently pricing in a swing in either direction following the earnings release. This is slightly higher than the average move of over the last four quarters, suggesting heightened short-term anticipation.

WMT implied volatility (IV) is 31.0, which is in the 89% percentile rank. This means that 89% of the time the IV was lower in the last year than the current level. The current IV (31.0) is 4.6% above its 20 day moving average (29.6) indicating implied volatility is trending higher.

Walmart Inc. (WMT) had 30-Day Implied Volatility (Mean) of 0.3073 for 2025-11-17.

Historical Reaction: Historically, the stock has fallen in two of the past four earnings reactions, reflecting mixed sentiment or failure to meet elevated expectations.

The Trading Thesis:

• Bullish Scenario (Upside): A significant upside surprise in U.S. Comps (especially in discretionary categories), a strong beat on EPS, and accelerated growth in the Advertising/Membership segments would likely propel the stock higher.

• Bearish Scenario (Downside): The stock trades at a premium valuation (Forward P/E ). Any sign of slowing comps growth, a significant miss on EPS, or a disappointing outlook/guidance for the critical holiday quarter (Q4) could lead to a sharp correction, as there is little room for error priced in.

Given the stock's premium valuation and the mixed historical reaction, short-term trading involves higher risk. A clear divergence from the consensus expectations, particularly on the forward guidance, would be the primary catalyst for a significant short-term move.

Technical Analysis - Exponential Moving Average (EMA)

We are seeing WMT trading below the 50-day period despite having a positive RSI momentum, and investors are moving into defensive stocks. The broad market pullback seems to have an effect on WMT as well.

So WMT would need to show a strong cost management and how they planned to navigate the impact from tariffs, as the valuation for WMT stock are also something that investors are weighing on, as we have seen some of the U.S. retailers who has release their earnings earlier, their stock price have also suffered.

Summary

Ahead of its fiscal third-quarter 2026 earnings report on November 20, Walmart (WMT) is expected by analysts to report moderate year-over-year growth in profit and sales, despite a cautious consumer spending environment.

Analysts project earnings per share (EPS) of approximately $0.60, representing a modest increase from the previous year, on revenues of roughly $177.5 billion. 

Key Focus Areas for Q3 2026 Analysis:

Consumer Health: Investors will scrutinize the report for signs of how sensitive consumers are to pricing and inflation, especially in discretionary general merchandise categories. The mix of traffic and ticket growth will offer clues about customer spending priorities heading into the crucial holiday season.

Strategic Growth Drivers: Attention will be on the growth and profitability of Walmart's higher-margin segments, such as advertising, membership services (Sam's Club, Walmart+), and the third-party marketplace. Analysts will assess if these areas continue to offset pressure on lower-margin general merchandise.

Cost Pressures: The impact of lingering tariffs and other inflationary pressures on inventory costs and profitability will be a key metric. Analysts will monitor how effectively Walmart has managed to navigate these headwinds.

Leadership Transition: The upcoming retirement of CEO Doug McMillon adds a new layer of interest. While the company has a strong succession plan, investors will look for reassurance regarding the continuity of its long-term strategy. 

Overall, analysts are cautiously optimistic, citing Walmart's continued strong position and diversified revenue streams, particularly its robust omnichannel and e-commerce performance. However, the stock's above-average valuation and persistent cost pressures mean management will need to demonstrate consistent execution to justify further gains.

Appreciate if you could share your thoughts in the comment section whether you think WMT would be able to show a better cost management, and also how WMT have navigate the impact from tariffs.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire @MillionaireTiger appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.