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WMT
Earnings call · Jul 2026 (Q2 FY27)

Walmart Q2 FY27 earnings call WMT

Aug 20, 2026 Source

Executive summary

Walmart Q2 FY27 — Strong Omni-Channel Growth and Strategic Investments Drive Share Gains

Walmart delivered a strong quarter, driven by its diversified omni-channel strategy and accelerating growth in platform businesses like marketplace, advertising, and membership. Strategic price investments, supported by tariff refunds, are driving market share gains and customer traffic, despite headwinds from fuel costs and health and wellness regulations. The company is confident in its model's ability to deliver durable long-term growth and improved economics.

Highlights

5

  • Enterprise net sales grew 5% in constant currency, reaching the top end of guidance.

  • Global e-commerce net sales increased 23%, marking the tenth consecutive quarter of over 20% growth for Walmart U.S.

  • Adjusted operating income grew 17.4% in constant currency, with underlying growth at the top end of 7%-10% guidance excluding tariff benefits.

  • Walmart U.S. e-commerce achieved double-digit incremental margins for the first half of the year.

  • Membership fee revenue reached an all-time high, up 17% globally, with Walmart+ seeing its best first half of membership growth.

Concerns

5

  • Walmart U.S. comp sales were negatively impacted by 125 basis points due to maximum fair pricing regulation on certain drugs.

  • Inventory increased 6% in constant currency, slightly higher than total enterprise sales growth.

  • More than $2 billion of incremental fuel-related costs are expected for the year, exceeding original guidance assumptions.

  • Cost related to the acquisition and integration of Vibe are expected to be an approximate 20 basis points headwind to OI growth.

  • In-store comps were down low single digits in Q2, consistent with a trend that began in late Q4 last year, primarily due to health and wellness impacts.

Guidance & targets

CategoryTargetConfidence
Full-year FY27 Net Sales Growth
4% to 5%
high materiality
High
Full-year FY27 Operating Income Growth (Constant Currency)
7% to 8.5%
high materiality
High
Full-year FY27 Adjusted EPS
$2.80 to $2.87
high materiality
High
Q3 FY27 Sales Growth (Enterprise)
3% to 3.75%
medium materiality
Medium
Q3 FY27 Operating Income Growth (Constant Currency)
2% to 4%
medium materiality
Medium
Q3 FY27 EPS
$0.62 to $0.64
medium materiality
Medium
Full-year FY27 Capital Expenditure
approximately 4% of annual net sales
medium materiality
Medium
Full-year FY27 Free Cash Flow Growth
double-digit growth
medium materiality
Medium

Segment performance

SegmentRevenueYoYQoQMargin
Walmart U.S.
Sales growth was slightly below expectations due to lower health and wellness sales impacted by maximum fair pricing. Core categories showed consistent performance. E-commerce momentum continued with strong growth in marketplace and advertising.
Comp sales ex-fuel: 2.6%E-commerce growth: 24%Marketplace sales growth: 52%Advertising sales growth (including VIZIO): 38%Walmart Connect sales growth: 43%Store-fulfilled deliveries sales growth: >40%Average weekly customers growth: 20%Fast delivery growth: 48%
—3.5%——
Sam's Club U.S.
Comp sales driven by strong transaction growth and solid unit volumes. E-commerce saw significant growth, particularly in 1-hour delivery. Membership growth was steady, with increased member counts and plus penetration.
Comp sales: 4.4%Transactions increase: 7%E-commerce growth: 26%Membership increase: nearly 6%
————
Walmart International
Strong performance led by China and India. E-commerce continues to be a significant growth driver, now representing 30% of the segment's sales. Platform capabilities are being scaled globally.
Constant currency sales increase: nearly 8%China sales growth: 9.7%E-commerce growth: 19%E-commerce mix of total sales: 30%
—7.9%——

WMT operating KPIs by quarter

WMT operating KPIs stated on its earnings calls, by fiscal quarter
KPI Oct 2025 Q3 FY26 Jan 2026 Q4 FY26Change vs prior quarter
Employees
2.1M John, you have 2.1 million associates standing behind you as you lead us in this next chapter. Source transcript
2M+ And then finally, I just want to thank our associates all around the world, over 2 million people who are working really hard each and every day to serve our customers. Source transcript
—

Operating figures the company states on every call, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Product announcements

ProductTypeDetails
Walmart+ in Canadalaunch
Cintella platform extension to Sam's Club U.S.expansion

Deals & partnerships

Vibe Acquisition of an advertising business to expand capabilities for advertisers.

Acquired Vibe to boost the advertising business, expanding capabilities for advertisers to reach customers through self-service tools and measure results against shopping behavior. Strengthens the overall platform alongside Walmart Connect and VIZIO.

Subway Partnership for prepared food solutions.

Partnership with Subway for prepared food solutions, expanding Walmart's offerings beyond traditional groceries and general merchandise to include meal solutions and prepared foods.

Risks & headwinds

Maximum Fair Pricing Regulation Impact on Health & Wellness Q2 FY27 and full FY27

125 basis points negative impact on Walmart U.S. comp sales in Q2 FY27; estimated similar impact for full FY27.

Mitigation:Focus on underlying performance and profit contribution of health and wellness business; leveraging pharmacy expertise, digital capabilities, and local fulfillment to deepen customer relationships and convenience.

Increased Fuel Costs FY27

More than $2 billion of incremental costs expected for FY27, above original guidance.

Mitigation:Guidance assumes fuel costs persist at current rates; company remains cautious and aims to sustain growth and share gains despite these costs.

Softer Consumer Environment Q2 FY27 and ongoing

Qualitative, noted as 'some near-term macro frost wins' and 'perhaps a psychological impact' from gas prices above $4.

Mitigation:Leaning heavily into lower prices and rollbacks to provide value and drive market share gains; focusing on durable share gains from price investments.

Flipkart's Big Billion Days Timing Impact Q3 FY27 and Q4 FY27

Over 100 basis points headwind to enterprise sales growth in Q3 FY27; expected similar benefit in Q4 FY27.

Mitigation:Acknowledged as a timing shift impacting cadence of sales growth between quarters, not overall annual performance.

Vibe Acquisition and Integration Costs FY27

Approximate 20 basis points headwind to OI growth for FY27.

Mitigation:Costs are incorporated into guidance; acquisition is expected to strengthen the advertising platform and create long-term value.

What to watch in Q3 FY27

Walmart U.S. Comp Sales Acceleration

Q3 FY27
Current 2.6% (ex-fuel, Q2 FY27)
Target Improvement in Q3 FY27

Why it matters

Management expects price investments to translate into stronger sales and accelerate comp growth, which is key to validating the effectiveness of the tariff refund reinvestment strategy.

Walmart U.S. sales growth is expected to improve in Q3 as the investment in customer value translates into stronger cells.

Q&A highlights

How are tariff refunds being invested in price, what is the impact on unit acceleration, and how will these lower prices be sustained and lapped in FY27?

Management confirmed tariff refunds were invested in price, particularly in grocery, leading to share gains. They noted a lag in the full impact of price investments, with unit and transaction growth already observed. The strategy is long-term, aiming for durable share gains and reinforcing the everyday low price model, with careful management of rollbacks and supplier collaboration.

“We're very thoughtful about those investments, the categories they went in, the timing of those investments. and we'll manage them across the two quarters. Our merchants have a lot of experience, delivering value, mixing out. They're doing this in a way that, as I said, resulted in share gains.”

asked by Katharine McShane · answered by John Furner

2 min read 6 chapters

Detailed narrative

Omni-Channel Strategy and Platform Growth

Walmart's strategy focuses on a strong retail foundation combined with faster-growing businesses like marketplace, advertising, and membership. These components are designed to be mutually reinforcing, expanding the company's capabilities and improving overall economics. The model is driving durable long-term growth and shareholder value, with global e-commerce up 23% and Walmart U.S. e-commerce achieving double-digit incremental margins in the first half of the year.

Price Investment and Market Share Gains

The company is committed to price leadership, investing heavily in rollbacks (11,000 in Q2, up from 7,200 in Q1) to help customers manage budgets. This strategy has led to market share gains, particularly in food categories, which are considered durable. Price gaps to conventional grocers in the U.S. are strong and widening, attracting higher-income households and reinforcing the everyday low price model.

Health & Wellness Impact on U.S. Comps

Walmart U.S. comp sales were significantly impacted by the health and wellness category. A 125 basis point headwind was attributed to deflation and brand-to-generic transfers under new maximum fair price regulation. This contrasts with a 100 basis point tailwind from GLP-1 branded drugs in prior years, which is now expected to be halved in FY27. Despite the top-line headwind, the underlying health and wellness business is performing well and contributing to profit, with pharmacy customers spending significantly more.

E-commerce and Speed of Delivery

Sustained e-commerce growth across all segments (Walmart U.S. up 24%, Sam's Club U.S. up 26%, International up 19%) is driven by speed and convenience. Fast delivery in the U.S. grew 48% in Q2, with sub-30-minute delivery expanded to 38 markets. This speed is an acquisition strategy, as customers using fast delivery shop more frequently and are more likely to become Walmart+ members, expanding Walmart's participation in everyday spending occasions like meal solutions.

Platform Scalability and Monetization

Walmart is building scalable capabilities across markets, including marketplace, fulfillment services, membership, and advertising. The U.S. marketplace platform capabilities were expanded to Mexico and Canada, and Walmart+ launched in Canada. Global advertising increased 38%, with Walmart Connect up 43%. The acquisition of Vibe further strengthens the advertising platform, expanding reach to small and medium-sized advertisers. These initiatives improve company economics by leveraging existing infrastructure globally.

Supply Chain and AI Advancements

Investments in automation, technology, and fulfillment capacity are improving efficiency, speed, and in-stock levels, supporting both first-party and marketplace businesses. Over 50% of e-commerce fulfillment volume is processed through automated facilities, and 3,100 U.S. stores use automated freight. AI is also being leveraged to enhance shopping experiences and associate productivity, with Sparky (AI assistant) users up 70% and spending 40% more per order.

AI-generated summary of the company's earnings call. Not investment advice.