To The Moon

$Wal-Mart(WMT)$ is usually treated as one of the stock market’s safest consumer businesses: when household budgets tighten, shoppers often trade down to its stores. Its fiscal second-quarter report challenged that assumption. Revenue and e-commerce grew, and management raised its annual forecast, yet US comparable sales slowed enough to suggest that even Walmart cannot escape pressure from fuel costs and cautious consumers.

Walmart logo with Consumer Staples background

Walmart reported on August 20 for the quarter ended July 31. Revenue increased 5.9% to $187.94 billion, adjusted earnings reached $0.81 per share and global e-commerce sales grew 23%. Operating profit rose 28.8% to approximately $9.4 billion. However, Walmart US comparable sales excluding fuel increased only 2.6%, the slowest rate in six years and below the roughly 3.8% market expectation. Walmart’s official fiscal-second-quarter materials provide the reported figures, while Reuters’ August 20 analysis explains the sales shortfall and management commentary.

The bullish case rests on the parts of Walmart that are becoming less dependent on store merchandise. Online sales grew roughly nine times faster than US comparable sales. Advertising, marketplace commissions and Walmart+ membership can carry higher margins than selling groceries, while stores increasingly function as local fulfilment hubs. Management also raised expected fiscal-2027 net-sales growth to 4%–5% and adjusted EPS to $2.80–$2.87.

The bearish case is that price investment may be masking weaker demand. A $2.9 billion tariff refund helped operating profit and is being used partly to reduce prices through year-end. Lower prices can protect market share, but they may not create strong profit growth if traffic and spending per visit remain soft. Management also expects approximately $2 billion of additional fuel expense, which matters both directly to logistics and indirectly through customers’ disposable income.

Valuation amplified the disappointment. Before the report, Walmart traded at a premium multiple that assumed steady market-share gains and reliable earnings. A rare comparable-sales miss therefore carried more information than an ordinary quarterly fluctuation.

Walmart fell 9.1% on August 20 to $103.84 after trading between $102.92 and $115.56 on about 83.6 million shares. The close near the low and exceptionally heavy volume are technically weak.

WMT Weekly Chart

On the weekly chart, the decline also confirms the breakdown from a broad double-top structure near $132–$135, after the neckline around $119 had already failed, so the intermediate trend remains bearish; however, WMT has now dropped directly into an important $102–$104 support zone, which previously acted as resistance before the 2025 breakout and could attract buyers. Because the selloff arrived on unusually heavy volume, I would not sell puts immediately into the first test of support, but would instead wait for price to stabilize above roughly $103.90 and show a bullish reversal or higher low. If that occurs, a 30–45 DTE cash-secured put around the $95 strike, preferably near 0.10–0.15 delta, would provide a reasonable margin of safety beneath the current support while benefiting from elevated post-selloff implied volatility and time decay. A decisive weekly close below roughly $102–$103 would invalidate the immediate support thesis and increase the risk of a deeper retracement toward the upper-$90s, making additional put selling less attractive.

The evidence leans neutral to moderately bearish in the near term. E-commerce and higher-margin services remain attractive, but slower US sales and price investment undermine the defensive-growth narrative. The view would improve if unit volumes accelerate without sacrificing underlying margin; it would be invalidated on the downside by another comparable-sales miss or a reduction in the raised annual forecast. This is personal opinion for education and is not financial advice.

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Disclaimer: This article is for informational and educational purposes only and does not constitute financial, investment, or trading advice. The views expressed are personal opinions based on publicly available information and are subject to change without notice. Investors should conduct their own research and consider their financial situation, risk tolerance, and investment objectives before making any investment decisions. I do not guarantee the accuracy or completeness of the information presented.