Walmart — Q2 FY27 Earnings Summary

Financial Performance

• Revenue grew 5.9% to $187.9 billion, or 5.1% in constant currency.
• Operating income increased 28.8% to $9.383 billion; adjusted operating income grew 17.4% in constant currency.
• GAAP EPS was $0.80; Adjusted EPS was $0.81, excluding a net loss of $0.12 on equity and other investments and a net benefit of $0.11 from a tax matter.
• Gross profit rate improved 96 basis points, driven by Walmart U.S. and tariff refund impacts.
• Operating cash flow was $19.7 billion, an increase of $1.4 billion year-over-year.
• Free cash flow was $5.5 billion, a decrease of $1.4 billion year-over-year.
• Total debt stood at $57.2 billion.
• Cash and cash equivalents were $11.5 billion.
• Return on Assets (ROA) was 8.0%; Return on Investment (ROI) was 15.4%.
• Inventory increased 6.7% to $61.6 billion, or 6.0% in constant currency.

Guidance and Future Outlook

• Raised full-year FY27 net sales growth outlook to 4.0% to 5.0% (constant currency), up from 3.5% to 4.5% previously.
• Raised full-year FY27 adjusted operating income outlook to 7.0% to 8.5% (constant currency), up from 6.0% to 8.0% previously.
• Raised full-year FY27 adjusted EPS outlook to $2.80 to $2.87, up from $2.75 to $2.85 previously.
• Q3 FY27 net sales guidance is 3.0% to 3.75% growth (constant currency).
• Q3 FY27 adjusted operating income guidance is 2.0% to 4.0% growth (constant currency).
• Q3 FY27 adjusted EPS guidance is $0.62 to $0.64.
• FY27 capital expenditures are expected to be approximately 4.0% of net sales, up from 3.5% previously.
• Q3 sales growth faces a headwind of over 100 basis points due to a timing shift of Flipkart's Big Billion Days between Q3 and Q4.
• Management expects to prioritize remaining tariff refunds into price investments and customer experience in the second half of the year.

Business Segments and Product Lines

• Walmart U.S.: Net sales were $125.2 billion (up 3.5%); comp sales (ex-fuel) grew 2.6%, driven by transactions and 80 basis points headwind from health & wellness. eCommerce sales grew 24%, contributing ~510 basis points to comp sales. Advertising revenue grew 38%, with Walmart Connect up 43%. Membership fee revenue grew double-digits. Operating income rose 20.6% to $8.1 billion.
• Walmart International: Net sales were $35.2 billion (up 12.8% reported, 7.9% constant currency). eCommerce sales grew 19%, led by store-fulfilled pickup and delivery. Advertising revenue grew 20%, led by Flipkart Ads. Operating income grew 16.6% to $1.4 billion.
• Sam's Club U.S.: Net sales were $25.7 billion (up 8.8%); comp sales (ex-fuel) grew 4.4%, driven by transactions and unit volumes. eCommerce sales grew 26%. Membership fee revenue grew 6%. Operating income rose 44.3% to $0.7 billion.

Market and Competitive Landscape

• Global eCommerce sales grew 23%, led by store-fulfilled pickup and delivery and marketplace growth.
• Global advertising business grew 38%, with strength across all segments.
• Walmart U.S. experienced broad-based share gains.
• Walmart International saw transaction counts and unit volumes up across all categories.

Risks and Challenges

• Q2 Walmart U.S. comp sales included a 125 basis point headwind from pharmacy deflation related to new maximum fair price regulations.
• Operating expense deleveraged 72 basis points in Walmart U.S. due to higher claims expense, depreciation, and associate healthcare costs.
• Sam's Club inventory increased 8.0% primarily due to higher fuel costs and volumes, including fuel upstreaming with a strategic partner.
• Forward-looking statements carry risks including currency fluctuations, inflation, consumer spending levels, supply chain disruptions, and competitive pressures.

Management Commentary and Tone

• John Furner, President and CEO, stated the team delivered another good quarter and noted steady progress on long-term value drivers, emphasizing that customers choose Walmart for price, speed, and convenience.
• John David Rainey, Executive Vice President and CFO, highlighted that the business model is getting stronger and more durable, noting the decision to raise guidance for the year.
• Management encouraged investors to consider Q2 and Q3 performance together to assess underlying growth, given the prioritization of tariff refunds into price investments.

Other Key Points

• The company repurchased 42.3 million shares year-to-date for $5.1 billion, with $25.1 billion remaining of the $30 billion authorization approved in February 2026.
• Walmart U.S. membership fee revenue reflected a record second quarter high in net adds.
• Currency rate fluctuations positively affected International net sales by $1.5 billion and operating income by $0.1 billion.
• Walmart operates in 19 countries with approximately 10,900 stores and serves approximately 280 million customers weekly.