BENTONVILLE, Ark. — Walmart Inc. delivered another quarter of solid sales growth as U.S. shoppers continued to flock to its stores and digital platforms, though unexpected expenses weighed on profits and snapped a three-year streak of quarterly earnings beats.
For the fiscal second quarter ending July 31, Walmart reported revenue of $177.4 billion, a 4.8% increase year over year and surpassing Wall Street forecasts. Comparable sales at Walmart U.S. rose 4.6%, driven by grocery and health and wellness, while Sam’s Club comparable sales grew 5.9%. International sales increased 5.5%, supported by growth in China, Mexico, and India. Global e-commerce jumped 25%, with delivery and express delivery identified as the fastest-growing digital fulfillment channels. Advertising revenue rose 46%, including growth from Walmart Connect and the integration of VIZIO.
Net income rose 56% to $7 billion, but adjusted earnings per share came in at 68 cents, below analyst forecasts of 73 cents, as higher self-insurance claims, litigation costs, and restructuring charges pressured the result. The $450 million in additional liability expenses accounted for a headwind of 4–5 cents per share, Walmart said.
Despite the profit miss, the company lifted its full-year net sales growth guidance to 3.75% to 4.75%, up from 3% to 4%, and reiterated its outlook for adjusted EPS of $2.52 to $2.62. Executives emphasized that at the midpoint, profit is expected to grow slightly faster than sales.
CEO Doug McMillon stated that tariffs are putting pressure on the company, causing its costs to rise every week. However, it’s maintaining stable prices for as long as possible.
“Tariffs won’t have a huge effect on their bottom line given their scale and supplier relationships, but it will likely make some dent,” said Melina Murren Vosse, assistant professor of finance at the University of San Diego’s Knauss School of Business, speaking to The New York Times.
In a note to clients, an analyst at GlobalData Retail said that: “Value is still en vogue. That’s the key message from Walmart.”
Analysts said the results demonstrate Walmart’s ability to attract households across various income levels, with notable share gains among higher-income shoppers. Jefferies analyst Corey Tarlowe called the company’s U.S. sales performance evidence of “durable momentum” despite economic uncertainty. “While tariffs introduce some near-term uncertainty, the focus on value and market share supports a favorable setup for sustained outperformance,” Tarlowe said.
Shares of Walmart slipped about 3% in early trading Thursday following the earnings release, but are still up more than 13% year-to-date, outperforming the broader market.
“Unexpected costs are part of managing a business of this complexity,” Walmart said in a statement to investors. “They don’t change our long-term outlook, nor our conviction in our profit growth trajectory. When we lean into these periods of economic uncertainty, Walmart emerges stronger.”
Target, which reported results a day before Walmart, painted a far weaker picture: comparable sales fell for the third straight quarter, operating profit dropped nearly 20%, and the company acknowledged it is struggling to regain momentum amid shifting consumer spending and tariff pressures. By contrast, Walmart’s nearly 5% U.S. comp growth and raised full-year outlook underscore the widening gap between the two retailers, with analysts noting that Walmart’s ability to draw higher-income households and lean on essentials like groceries and health to fuel market share gains, while Target’s more discretionary mix continues to drag.
Quarterly Results at a Glance
- Revenue: $177.4B, +4.8% (5.6% cc) vs. $169.3B last year.
- Walmart U.S.:
- Net sales: $120.9B, +4.8%.
- Comp sales (ex-fuel): +4.6%, led by grocery and health & wellness.
- eCommerce sales: +26%, driven by store-fulfilled delivery (+50%) and marketplace growth.
- Operating income: $6.7B, up 2%.
- Sam’s Club U.S.:
- Net sales: $23.6B, +3.4%; comps +5.9%.
- eCommerce sales: +26%.
- Membership income: +7.6%.
- Operating income: $0.5B, down 15.8% (due to supply chain reorganization charges).
- Walmart International:
- Net sales: $31.2B, +5.5% reported (+10.5% cc).
- Growth led by China, Walmex, and Flipkart.
- eCommerce up 22%.
- Operating income: down 9.8% reported (–2.8% cc), pressured by investments.
- Digital & Advertising:
- Global eCommerce: +25%.
- Global advertising: +46%, with Walmart Connect U.S. up 31%.
- Profitability:
- Operating income: $7.3B, down 8.2% (adjusted +0.4% cc).
- Net income: $7.0B, up 56% from $4.5B last year.
- GAAP EPS: $0.88 vs. $0.56.
- Adjusted EPS: $0.68 vs. $0.67, missing analyst consensus of $0.73.
- Margins: Gross profit rate rose slightly to 24.5%.
Financial Position
- Cash & cash equivalents: $9.4B.
- Debt: $50.3B.
- Operating cash flow: $18.4B, up $2B year-over-year.
- Free cash flow: $6.9B, up $1.1B.
- Inventory: $57.7B, up 3.8% YoY.
- Share repurchases: 67.4M shares year-to-date, $6.2B.
Guidance Update
- Q3 FY26:
- Net sales growth: +3.75% to +4.75% (cc).
- Operating income: +3% to +6% (cc).
- Adjusted EPS: $0.58–$0.60.
- Full-Year FY26:
- Net sales growth: raised to 3.75%–4.75% (from 3%–4%).
- Adjusted operating income growth: 3.5%–5.5% (unchanged).
- Adjusted EPS: $2.52–$2.62 (up from $2.50–$2.60).
