Key Takeaways
- Walmart delivered Q2 adjusted earnings of $0.81 per share, surpassing the $0.74 consensus forecast, while revenue reached $187.9 billion, representing 5.9% year-over-year growth.
- U.S. comparable sales for Walmart-only locations increased merely 2.6%, falling short of the 3.67% expectation and marking the weakest U.S. sales expansion in six years.
- Shares of WMT tumbled approximately 7% during premarket hours, dipping below year-to-date starting levels.
- The company provided Q3 adjusted EPS outlook of $0.62 to $0.64, while lifting full-year EPS projections to $2.80 to $2.87.
- Wall Street firms including Jefferies, RBC, UBS, and Evercore ISI retained positive ratings, attributing the shortfall to macroeconomic factors rather than company-specific challenges.
Shares of Walmart (WMT) plummeted approximately 7% in Thursday’s premarket session following the retail giant’s announcement that U.S. comparable sales climbed just 2.6%, significantly trailing the 3.67% consensus projection. The decline pushed the stock beneath its opening level from earlier this year.
The retailer disclosed second-quarter adjusted earnings per share of $0.81, exceeding the Street’s $0.74 projection. Total revenue registered at $187.9 billion, marking a 5.9% year-over-year increase and surpassing the anticipated $186.75 billion.
While the headline earnings figure impressed, the U.S. comparable sales performance triggered the selloff. Mizuho’s analyst David Bellinger characterized it as a “worst-case scenario” and “one of the biggest misses in years from WMT.”
Company leadership emphasized that comparable sales would have reached 3.4% when stripping out health and wellness categories, which faced headwinds from pharmacy-related deflation connected to maximum fair price regulations.
The company also indicated it is strategically reducing prices to capture additional market share, positioning the sales deceleration as a deliberate reinvestment strategy rather than weakening consumer demand.
Analyst Community Maintains Optimism
Jefferies analyst Corey Tarlowe maintained his Buy recommendation, highlighting ongoing transaction momentum, widespread market share expansion, and robust performance across e-commerce, advertising, marketplace, and membership segments.
RBC Capital analyst Steven Shemesh observed that Walmart achieved nearly 10% operating profit expansion when excluding tariff reimbursements. He characterized the deceleration as a “broader macro dynamic” rather than evidence that Walmart’s competitive gains are diminishing.
UBS analyst Michael Lasser acknowledged the results will likely spark discussion but affirmed his firm’s constructive stance. Evercore ISI analyst Greg Melich retained his Outperform rating and highlighted that full-year sales guidance was elevated to 4.0% to 5.0%, up from the previous 3.5% to 4.5% range.
Key Business Segments Show Continued Strength
Worldwide eCommerce revenue advanced 23%, propelled by store-fulfilled pickup options, delivery services, and marketplace expansion. Walmart’s global advertising division soared 38%, with U.S. advertising revenue matching that impressive 38% growth rate.
Operating income climbed 28.8%, or 17.4% on an adjusted constant currency basis. Gross profit margin expanded by 96 basis points, partially attributed to tariff reimbursements collected during the second quarter.
CFO John David Rainey indicated the retailer intends to channel those tariff refunds into customer experience enhancements and pricing investments throughout the remainder of the year.
Looking ahead to Q3, Walmart anticipates net sales growth between 3.0% and 3.75% in constant currency terms. The company noted a headwind exceeding 100 basis points due to a timing adjustment of Flipkart’s Big Billion Days event between the third and fourth quarters.
Full-year fiscal 2027 adjusted EPS guidance received an upward revision to $2.80 to $2.87, compared to the previous $2.75 to $2.85 range.
“Our team delivered another good quarter, and we continue to make steady progress on the long-term value drivers of our business,” stated Walmart U.S. President and CEO John Furner.
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