Walmart posts strong Q2 FY2026 revenue growth, with eCommerce +25% and raises full-year outlook despite profit pressures

Overview

Walmart Inc. delivered solid revenue growth in the second quarter of fiscal 2026, driven by continued momentum in its omnichannel strategy, robust eCommerce expansion, and growth in advertising and membership income. While operating income declined due to higher legal and restructuring costs as well as elevated self-insurance expenses, adjusted results showed resilience.

CEO Doug McMillon highlighted the role of digital engagement and AI in enhancing customer experiences, reinforcing Walmart’s position as a people-led, tech-powered retailer: “The top-line momentum we have in our business comes from how we’re innovating and executing. 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. We’re people-led and tech-powered, and I love how our associates continue to drive change and results for our company.”

Q2 FY2026 vs. Q2 FY2025:

Total revenue was $177.4bn (+4.8% YoY or +5.6% constant currency), supported by strong gains in Walmart U.S., International, and Sam’s Club.
- Walmart U.S. sales rose to $120.9bn (+4.8% YoY), with comps up 4.6%, as strong grocery and health & wellness demand, rollback pricing, and 26% eCommerce growth (store-fulfilled delivery +50%) offset liability cost pressures, driving 2% operating income growth and higher advertising and membership income.
- Walmart International net sales grew to $31.2bn (+5.5% or 10.5% cc), led by China, Walmex, and Flipkart, with 22% eCommerce growth and 15% advertising gains, though operating income fell 9.8% (-2.8% cc) due to strategic investments and $1.5bn currency headwinds.
- Sam’s Club U.S. net sales increased to $23.6bn (+3.4% YoY), with comps up 5.9%, transactions +3.9%, and eCommerce +26%, while membership income advanced 7.6%. However, operating income declined to $0.5bn (-15.8% YoY), pressured by supply chain charges and liability expenses, leaving adjusted operating income slightly down.
Global eCommerce sales grew 25% YoY, led by store-fulfilled pickup & delivery and marketplace, underscoring Walmart’s omnichannel leadership.
Global advertising business rose 46% YoY (including VIZIO), with Walmart Connect U.S. up 31%, reflecting momentum in high-margin digital services.
Membership and other income increased 5.4% YoY, including 15.3% global membership growth, highlighting deeper customer engagement.
Gross margin rate improved by 4 basis points, led by Walmart U.S., reflecting stronger mix and disciplined pricing.
Operating income declined to $7.3bn (-8.2% YoY), but adjusted operating income was flat (+0.4% cc), with headwinds from legal, restructuring, and higher liability claims expenses.
GAAP EPS was $0.88, while adjusted EPS was $0.68, excluding investment gains, legal matters, and restructuring charges.
Consolidated net income attributable to Walmart rose to $7.0bn (+56% YoY), benefiting from net investment gains despite lower operating profit.
Operating cash flow was $18.4bn (+$2.0bn YoY) and free cash flow reached $6.9bn (+$1.1bn YoY), reflecting improved working capital and disciplined capital spending.
Share repurchases totaled $6.2bn YTD (67.4m shares), with $5.9bn remaining under the $20bn authorization.

For Q3 FY2026, Walmart expects net sales growth of 3.75%-4.75% in constant currency, operating income growth of 3.0%-6.0% (cc), and adjusted EPS of $0.58-$0.60. For the full year, the company raised its net sales outlook to 3.75%-4.75% growth and adjusted EPS to $2.52-$2.62, while keeping adjusted operating income guidance unchanged at 3.5%-5.5% growth. Management emphasized continued momentum in eCommerce, advertising, and membership, coupled with disciplined execution to balance cost pressures with profitable growth.

Walmart shares declined sharply by -4.5% after the release of Q2 FY2026 results, marking the first time in a considerable period that the company missed Wall Street estimates. This drop pushed the stock directly into a test of its 50-day SMA ($97.89), despite management raising guidance for both the next quarter and the full year. Technically, the stock remains above the 200-day SMA ($94.34), keeping the broader trend intact, but the recent breakdown highlights near-term vulnerability. The RSI currently sits at 43.81, still in neutral territory, suggesting room for further downside if selling pressure persists. Year-to-date, Walmart’s stock remains positive with an appreciation of nearly +9%, but investors are cautious about potential corrections in the coming sessions, particularly as trade tariffs could weigh further on the company’s performance.