Key Takeaways
- Walmart delivered Q2 adjusted earnings of $0.81 per share, surpassing the $0.74 consensus forecast, while revenue reached $187.9 billion, marking a 5.9% year-over-year increase.
- U.S. comparable sales for Walmart-only locations rose merely 2.6%, falling short of the 3.67% analyst projection and representing the weakest domestic sales expansion in six years.
- Shares of WMT plummeted approximately 7% during premarket hours, dropping the stock to levels last seen at the beginning of the year.
- Third-quarter adjusted earnings guidance was set at $0.62 to $0.64 per share, while the full-year forecast was lifted to a range of $2.80 to $2.87.
- Wall Street firms including Jefferies, RBC, UBS, and Evercore ISI maintained positive outlooks, attributing the shortfall to broader economic headwinds rather than company-specific challenges.
Shares of Walmart (WMT) tumbled approximately 7% during Thursday’s premarket session following the retail giant’s announcement that U.S. comparable sales increased only 2.6%, significantly trailing the 3.67% consensus projection. The sharp decline pushed the stock below its year-to-date starting point.
The retail behemoth revealed second-quarter adjusted earnings of $0.81 per share, exceeding the analyst consensus of $0.74. Total revenue registered at $187.9 billion, representing a 5.9% year-over-year climb and surpassing the anticipated $186.75 billion.
While the bottom-line results exceeded expectations, the disappointing U.S. comparable sales figure drove most of the negative market reaction. Mizuho’s David Bellinger characterized the outcome as a “worst-case scenario” and “among the most significant misses WMT has experienced in recent years.”
Company executives emphasized that comparable sales would have registered at 3.4% when health and wellness categories are excluded, which faced headwinds from pharmacy-related deflation associated with maximum fair price regulations.
The retailer also disclosed its strategy of aggressively reducing prices to capture additional market share, positioning the sales slowdown as a strategic reinvestment decision rather than evidence of weakening consumer demand.
Bullish Analyst Perspectives
Jefferies analyst Corey Tarlowe maintained his Buy recommendation, highlighting ongoing transaction volume expansion, widespread market share capture, and robust performance across e-commerce, advertising, marketplace operations, and membership programs.
RBC Capital’s Steven Shemesh observed that Walmart achieved nearly 10% operating profit expansion when tariff refunds are excluded from calculations. He characterized the deceleration as reflecting “broader macroeconomic dynamics” rather than indicating that Walmart’s competitive gains are diminishing.
UBS analyst Michael Lasser acknowledged the results will likely spark discussion but affirmed his firm’s optimistic stance. Evercore ISI’s Greg Melich retained his Outperform rating and highlighted that annual sales guidance was elevated to a 4.0% to 5.0% range, up from the previous 3.5% to 4.5% outlook.
Key Business Segments Continue Strong Performance
Global e-commerce revenue surged 23%, propelled by store-fulfilled pickup services, delivery operations, and marketplace expansion. The company’s worldwide advertising division jumped 38%, with domestic advertising revenue matching that impressive 38% growth rate.
Operating income advanced 28.8%, or 17.4% on an adjusted constant currency basis. Gross profit margin expanded by 96 basis points, partially attributed to tariff refunds collected during the second quarter.
CFO John David Rainey indicated the organization intends to reinvest those tariff refunds into enhancing customer experience and implementing price reductions throughout the latter half of the year.
Looking ahead to Q3, Walmart projects net sales growth between 3.0% and 3.75% on a constant currency basis. Management identified a headwind exceeding 100 basis points related to a calendar shift of Flipkart’s Big Billion Days promotional event between the third and fourth quarters.
Full-year fiscal 2027 adjusted earnings guidance received an upward revision to $2.80 to $2.87 per share, climbing from the previous $2.75 to $2.85 range.
“Our team executed another strong quarter, and we continue advancing steadily on the long-term value drivers that power our business,” stated John Furner, Walmart U.S. President and CEO.
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