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Walmart Inc. (WMT)·Q2 2026 Earnings Summary

Executive Summary

  • Q2 FY26 delivered strong top-line with total revenues of $177.4B (+4.8% reported; +5.6% cc), underpinned by 25% global eCommerce growth and accelerating Walmart U.S comps (+4.6%) .
  • Profit quality mixed: GAAP EPS was $0.88 while adjusted EPS was $0.68, pressured by higher self-insured general liability claims (~560 bps headwind to adjusted OI growth) and discrete legal/restructuring charges; adjusted EBITDA margin slipped ~10 bps YoY to 6.5% .
  • Guidance: Q3 FY26 net sales (cc) +3.75%–4.75%, operating income (cc) +3.0%–6.0%, adjusted EPS $0.58–$0.60; FY26 outlook raised for net sales to +3.75%–4.75% (cc) and adjusted EPS to $2.52–$2.62 (currency headwind $0.02–$0.03), while adjusted operating income (cc) unchanged at +3.5%–5.5% .
  • Catalysts: top-line beat versus Street, raised FY26 sales/EPS, secular growth in advertising (+46% global; Walmart Connect +31%) and membership (+15% global), and accelerating omni speed (≈1/3 of store deliveries in ≤3 hours) .

What Went Well and What Went Wrong

  • What Went Well

    • eCommerce scale and speed: 25% global growth; ~1/3 of U.S. store deliveries expedited (≤3 hours), with 20% delivered in ≤30 minutes; Walmart Connect up 31% .
    • Market share gains across income cohorts; Walmart U.S. comps +4.6% with strength in grocery and health & wellness; general merchandise positive low single-digits .
    • Strategic growth businesses lifting profit mix: advertising +46% globally (incl. VIZIO), membership income +15% globally; “We’re people-led and tech-powered…the way we’re deploying AI will make these experiences even better.” – Doug McMillon .

  • What Went Wrong

    • Claims cost pressure: adjusted SG&A deleveraged 35 bps; CFO accrued an incremental $450M in Q2 for general liability/workers’ comp, producing ~560 bps headwind to adjusted OI growth .
    • Sam’s Club restructuring: ~$80M strategic supply chain reorganization charges; gross margin rate ex-fuel −21 bps, adjusted operating income pressured by ~710 bps from higher claims .
    • International margin compression: Int’l gross margin −80 bps; OI (cc) −2.8% due to format/channel mix shifts and price investments across markets (India, Canada, Mexico) .

Financial Results

Consolidated performance versus prior periods

MetricQ4 FY25Q1 FY26Q2 FY26
Total Revenues ($USD Billions)$180.6 $165.6 $177.4
Net Sales ($USD Billions)$178.8 $164.0 $175.8
Operating Income ($USD Billions)$7.86 $7.14 $7.29
Gross Profit Margin %23.9% 24.2% 24.5%
Operating Expenses / Net Sales %20.4% 20.8% 21.2%
GAAP EPS ($)$0.65 $0.56 $0.88
Adjusted EPS ($)$0.66 $0.61 $0.68

Versus Wall Street consensus (S&P Global)

MetricConsensus*ActualSurprise*
Revenue ($USD Billions)$174.32*$177.40 +$3.08*
EPS ($)$0.739*$0.68 −$0.059*

Values with asterisks (*) retrieved from S&P Global.

Segment breakdown (Q2 FY26)

SegmentNet Sales ($USD Billions)Comp SaleseCommerce GrowthOperating Income
Walmart U.S.$120.9 +4.6% (ex fuel) +26% $6.7B (+2.0% YoY)
Walmart International$31.2; $32.7 (cc) n/a+22% $1.2B; $1.3B (cc)
Sam’s Club U.S.$23.6; $21.2 ex fuel +5.9% (ex fuel) +26% $489M; Adj. $569M

KPIs (Q2 FY26)

KPIWalmart U.S.Sam’s Club U.S.Consolidated
Transactions (ex fuel)+1.5% +3.9% n/a
Average Ticket (ex fuel)+3.1% +2.0% n/a
eCommerce Contribution to Comp~420 bps ~350 bps (ex fuel) n/a
Membership Income GrowthDouble-digit Walmart+ +7.6% Global +15%
Global eCommerce Growthn/an/a+25%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net Sales (cc) GrowthQ3 FY26n/a+3.75% to +4.75%; incl. ~20 bps VIZIO tailwind New
Operating Income (cc) GrowthQ3 FY26n/a+3.0% to +6.0%; incl. ~140 bps VIZIO headwind New
Adjusted EPSQ3 FY26n/a$0.58 to $0.60 New
Net Sales (cc) GrowthFY26+3.0% to +4.0% (2/20/25) +3.75% to +4.75% (8/21/25) Raised
Adjusted Operating Income (cc)FY26+3.5% to +5.5% +3.5% to +5.5% Maintained
Adjusted EPSFY26$2.50–$2.60; ~$0.05 FX headwind $2.52–$2.62; $0.02–$0.03 FX headwind Raised/narrowed FX headwind
Interest, netFY26+$100M to +$200M +$100M to +$200M Maintained
Effective Tax RateFY26~23.5%–24.5% ~23.5%–24.5% Maintained
Non-controlling InterestFY26Relatively flat Relatively flat Maintained
Capital ExpendituresFY26~3.0%–3.5% of net sales ~3.0%–3.5% Maintained
Share Repurchase Authorization RemainingCurrent$12.0B (Q4 FY25) $5.9B (Q2 FY26) Reduced via buybacks

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 FY25 and Q1 FY26)Current Period (Q2 FY26)Trend
AI/Technology InitiativesFocus on delivery speed, marketplace and ad-tech; adjusted not explicitly AI-centric New AI leadership roles; “Sparky” customer assistant; building associate/supplier/developer “super agents” to scale productivity and personalization Intensifying focus; structural investment
Supply Chain/Omni SpeedNet delivery cost/order ↓ >20% (Q4); 93% U.S. households eligible for <3h delivery (Q1) ~1/3 expedited deliveries; 20% ≤30 minutes; Sam’s supply chain reorg charges ($80M) Faster execution; near-term restructuring costs
Tariffs/Macro ElasticityWithheld specific Q2 OI/EPS guidance in Q1 given cost backdrop Tariff impacts flowing through REM; merchants managing price gaps and markdowns; maintaining share while preserving flexibility Uncertain but better visibility; flexible pricing
Product PerformanceGM slightly negative in Q1; strong holiday seasonal in Q4 Grocery and health & wellness strong; general merchandise positive LSD in U.S.; China comps +21.5% Improving discretionary mix sequentially
Regional TrendsInt’l net sales (cc) +7.8% in Q1; China +22.5% Int’l net sales (cc) +10.5%; China +30.1%; Walmex comps +4.4%; Canada eCom +24% Accretive top-line; profitability investing
Regulatory/LegalQ4 opioid-related adjustment (benefit) Discrete legal charges ($440M in OS,G&A and $75M in interest) adjusted out of EPS; adjusted SG&A deleveraged 35 bps Transitory pressure; adjusted presentation
Advertising & MembershipQ4 ad +29%; Q1 ad +50%; membership growing Ad +46% globally (incl. VIZIO); Walmart Connect +31%; membership income +15% globally Secular growth strengthening profit mix

Management Commentary

  • Strategy: “Connecting with our customers and members through digital experiences is helping to drive our business, and the way we’re deploying AI will make these experiences even better.” – Doug McMillon, CEO .
  • Profit mix transformation: CFO highlighted diversified profit streams (advertising, membership, marketplace) contributing ~50% of incremental profit in Q2 excluding claims costs .
  • Pricing & elasticity: “We’re keeping our prices as low as we can for as long as we can…We do see, as costs go up, units change…managing mix gives us a lot of flexibility.” – Doug McMillon .
  • Risk management: “We accrued an additional $450M…equates to a headwind of 560 bps to adjusted operating income growth in the quarter.” – John Rainey, CFO .

Q&A Highlights

  • Profit resilience vs. temporary cost noise: Management emphasized long-term trend of growing profits faster than sales despite unexpected costs (claims), maintaining annual OI guidance and raising sales/EPS guidance .
  • AI acceleration as growth lever: New AI leadership and “Sparky” assistant to enhance discovery, personalization, and operational productivity; omni assets (stores + digital) cited as unique advantage .
  • Inventory health: Clean inventories, strong back-to-school sell-through, unit growth supporting Sam’s; inventory up ~2% U.S., ~11.7% at Sam’s to support demand .
  • Pricing strategy & rollbacks: Rollbacks increased to ~7,400; merchants actively managing price gaps and markdown cadence to maintain share during tariff-related pressure .
  • Competitive stance in grocery delivery: Competition improving, Walmart remains focused on price, assortment, and convenience (expedited delivery) to defend advantages .

Estimates Context

  • Q2 FY26 revenue beat consensus; EPS missed: Revenue $177.4B vs $174.3B*; adjusted EPS $0.68 vs $0.739* .
  • Drivers of divergence: Top-line outperformance from eCommerce and International; EPS impacted by higher-than-anticipated claims expense and discrete legal/restructuring items .

Values with asterisks (*) retrieved from S&P Global.

Key Takeaways for Investors

  • Top-line momentum intact with secular omni gains; advertising and membership scaling the profit mix even as merchandise mix (grocery/health) dilutes near-term margins .
  • Near-term EPS pressure appears transitory as claims inflation normalizes; annual OI guidance unchanged, implying underlying structural margins progressing .
  • International growth (China, Walmex) is accretive to consolidated sales; profitability investments should support long-term ROI .
  • Raised FY26 sales/EPS guidance supports medium-term thesis of profit growing faster than sales despite VIZIO and leap-year headwinds baked into the framework .
  • AI/tech initiatives (Sparky, agent architecture) and delivery-speed leadership are credible differentiators to drive customer acquisition/frequency and lower fulfillment costs over time .
  • Sam’s Club remains a comp engine with omni engagement (Scan & Go, club-fulfilled delivery) and membership mix upgrade (Plus), albeit temporarily weighed by reorg/claims .
  • Trading lens: Revenue beat and raised FY26 EPS could offset EPS miss, with investor focus on sustainability of ad/member growth, holiday setup, and cadence of claims costs through H2 .