Walmart Raises Full-Year Outlook as Digital Sales Drive Strong Q2 Growth

Walmart raised its full-year outlook after reporting second-quarter revenue of $187.9 billion, up 5.9% from a year earlier, as digital sales continued to expand across its U.S., international and Sam’s Club businesses. Global eCommerce sales increased 23%, while adjusted operating income rose 17.4% on a constant-currency basis.

The retailer’s second-quarter earnings release showed that the strongest growth remained tied to digital convenience, marketplace activity, advertising and membership. Walmart U.S. eCommerce sales rose 24%, International eCommerce increased 19%, and Sam’s Club U.S. eCommerce grew 26%.

Walmart now expects fiscal 2027 net sales to increase 4.0% to 5.0% on a constant-currency basis, up from its prior range of 3.5% to 4.5%. It also lifted its adjusted operating income growth forecast to 7.0% to 8.5%, from 6.0% to 8.0%, and raised its adjusted earnings-per-share outlook to $2.80 to $2.87 from $2.75 to $2.85.

Digital channels take a larger role in Walmart’s U.S. growth

Walmart U.S., by far the company’s largest segment, generated $125.2 billion in second-quarter net sales, an increase of 3.5%. Comparable sales excluding fuel rose 2.6%, with transactions up 1.5% and the average ticket up 1.1%. The company said comparable sales were partly constrained by pharmacy deflation related to new maximum fair price regulation.

Digital activity contributed more heavily to those comparable sales than it did a year earlier. Walmart said eCommerce contributed about 510 basis points to U.S. comparable sales in the quarter, compared with roughly 420 basis points a year earlier. Store-fulfilled delivery increased 40%, while marketplace net sales rose more than 50%. eCommerce represented about 23% of Walmart U.S. sales during the period.

The company is also earning more from activities around its core retail business. Walmart’s U.S. advertising business grew 38%, while Walmart Connect increased 43% excluding VIZIO. Global advertising rose 38%, and global membership fee revenue increased 17%. Those businesses can carry different economics from selling merchandise directly and have become an important part of Walmart’s effort to improve profitability as more shopping shifts online.

Digital growth was not confined to the U.S. segment. Walmart International reported net sales of $35.2 billion, up 12.8% on a reported basis and 7.9% in constant currency. International eCommerce sales increased 19%, with the company pointing to store-fulfilled pickup and delivery across markets. Advertising in the international business grew 20%, led by Flipkart Ads.

At Sam’s Club U.S., net sales increased 8.8% to $25.7 billion. Comparable sales excluding fuel rose 4.4%, supported by a 7.0% increase in transactions even as average ticket fell 2.5%. eCommerce sales at Sam’s Club increased 26%, and membership fee revenue grew 6% as member counts and Plus membership penetration increased.

Full-year guidance moves higher after the second-quarter performance

The updated outlook reflects Walmart’s expectation that the sales momentum can continue through the rest of the fiscal year. In addition to lifting its full-year net sales range to 4.0% to 5.0% growth, Walmart raised adjusted operating income growth guidance to 7.0% to 8.5% and adjusted EPS to $2.80 to $2.87. The company also increased its capital expenditure expectation to about 4.0% of net sales from about 3.5% previously.

For the third quarter, Walmart expects constant-currency net sales growth of 3.0% to 3.75%, adjusted operating income growth of 2.0% to 4.0%, and adjusted EPS of $0.62 to $0.64. Management said the timing shift of Flipkart’s Big Billion Days from the third quarter into the fourth quarter is expected to reduce third-quarter sales growth by more than 100 basis points.

The company’s earnings release filed with the SEC also makes clear that the guidance remains subject to uncertainty. Walmart’s forecasts are provided on an adjusted basis because movements in the fair value of equity and other investments can affect reported results and cannot be predicted reliably in advance.

That distinction is relevant this quarter. Adjusted EPS was $0.81, while GAAP diluted EPS was $0.80, down from $0.88 a year earlier. Consolidated net income attributable to Walmart fell 9.4% to $6.37 billion, even though operating income increased sharply. Walmart said its adjusted EPS excluded a $0.12-per-share net loss from equity and other investments and a $0.11-per-share net benefit from a tax matter.

Tariff refunds lifted profit, but underlying operating growth remained strong

Walmart’s operating income rose 28.8% to $9.38 billion in the quarter. On an adjusted constant-currency basis, operating income increased 17.4%. The company said the result included a benefit from tariff refunds that was partly offset by price investments, and that underlying operating income growth excluding that net effect was at the top end of its 7% to 10% guidance range.

Walmart said it received nearly $2.9 billion in refunds related to IEEPA tariffs during the quarter and prioritized investment in lower prices. Gross profit rate increased 96 basis points, led by Walmart U.S., where the tariff refunds and a more favorable business mix helped offset price investments and higher fuel costs. Walmart U.S. operating income rose 20.6% to $8.1 billion.

Not every cost line improved. Walmart U.S. operating expenses deleveraged by 72 basis points, which the company attributed to higher claims expense, depreciation and associate healthcare costs. Inventory across the company increased 6.7% to $61.6 billion, reflecting strategic initiatives and inflation. The higher inventory level will remain relevant as Walmart moves through the second half of its fiscal year.

Cash generation was mixed. Operating cash flow for the first six months increased by $1.4 billion to $19.7 billion, but free cash flow fell by $1.4 billion to $5.5 billion. Walmart also said it repurchased 42.3 million shares for $5.1 billion during the first half, leaving $25.1 billion under the $30 billion authorization approved in February.

The quarter therefore showed two sides of Walmart’s current earnings story. Sales growth is increasingly coming through digital channels, marketplace activity, advertising and membership, while profit growth also included a tariff-refund benefit that Walmart separates from underlying operating growth. By raising its full-year outlook, Walmart is signaling that it expects the underlying sales and operating trends to remain strong enough to support higher growth even as some second-quarter benefits are reinvested in pricing.

Walmart’s next scheduled earnings release is set for November 19, when the company will report third-quarter fiscal 2027 results and investors will be able to compare actual sales and operating income with the ranges issued alongside the second-quarter report.