Walmart reported second-quarter revenue of $187.9 billion, up 5.9% from the prior year (5.1% in constant currency), with operating income jumping 28.8% to $2.1 billion. The acceleration masks a more complex picture: tariff refunds received in the quarter boosted gross profit by 158 basis points at Walmart U.S., while the company simultaneously invested those gains into customer pricing. Stripping out tariff impacts, adjusted operating income grew 17.4% in constant currency. The company raised its full-year fiscal 2027 guidance, now expecting net sales growth of 4.0% to 5.0% and adjusted operating income growth of 7.0% to 8.5%, both in constant currency.
Walmart U.S. comp sales grew 2.6% excluding fuel, a deceleration from 4.6% in the prior year quarter, though transactions rose 1.5% and eCommerce contributed approximately 510 basis points to the comp. Walmart U.S. net sales reached $125.2 billion, up 3.5%, with operating income up 20.6% to $8.1 billion. Sam’s Club U.S. comp sales grew 4.4% excluding fuel, down from 5.9% a year ago, though transactions surged 7.0%. Walmart International net sales grew 12.8% reported (7.9% in constant currency) to $35.2 billion, with operating income up 16.6% reported (5.7% in constant currency). Global eCommerce sales accelerated 23%, while the global advertising business grew 38%. For Q3, the company guides net sales growth of 3.0% to 3.75% and adjusted operating income growth of 2.0% to 4.0%, both in constant currency. Adjusted EPS came in at $0.81 for the quarter; the company guides $0.62 to $0.64 for Q3 and $2.80 to $2.87 for full-year FY27.
What it means
The headline operating income gain of 28.8% is largely a one-time event. The company received tariff refunds in Q2 and explicitly states it is reinvesting those refunds into customer pricing in the second half of the year, which will suppress operating income growth in coming quarters. Management notes that “setting aside this net impact, underlying operating income growth was at the top end of our guidance,” suggesting the operational performance underneath the tariff benefit was solid but not exceptional. The adjusted operating income growth of 17.4% in constant currency is the more durable measure and still represents acceleration from the prior year’s 4.7% full-year revenue growth and 4.2% operating margin.
The deceleration in Walmart U.S. comp sales from 4.6% to 2.6% year-over-year is the material operational question. The company attributes 80 basis points of headwind to health and wellness (pharmacy deflation from new maximum fair price regulation effective January 1), and notes that eCommerce contributed 510 basis points to the comp, implying the physical store comp would have been negative without digital. Transactions grew only 1.5% while average ticket fell 1.1%, suggesting customers are visiting more frequently but buying less per trip, a pattern consistent with price-conscious behavior. Sam’s Club U.S. also decelerated in comp sales (4.4% from 5.9%), though transactions accelerated sharply to 7.0%, again pointing to frequency gains offset by lower basket size. The company’s guidance for Q3 sales growth of 3.0% to 3.75% is materially lower than Q2’s 5.9%, and management explicitly warns of “over 100 bps headwind to growth related to a timing shift of Flipkart’s Big Billion Days between Q3 and Q4,” suggesting organic growth may be softer than the headline suggests.
The honest open question is whether the eCommerce contribution of 510 basis points at Walmart U.S. and 450 basis points at Sam’s Club masks a slowdown in physical store traffic and whether the company’s price investments will sustain transaction growth or merely arrest ticket decline. The inventory build of 6.7% (6.0% in constant currency) outpaced sales growth and is attributed to “strategic initiatives and inflation,” but the document does not specify which initiatives or quantify the inflation component, leaving unclear whether inventory is being deployed to support margin recovery or to hedge supply chain risk.
What to watch
The Q3 earnings release, expected in November 2026, will show whether the tariff reinvestment into pricing sustains the transaction growth seen in Q2 or whether average ticket continues to decline. The company’s own guidance for Q3 operating income growth of only 2.0% to 4.0% (versus 17.4% adjusted in Q2) signals management expects a material slowdown once tariff benefits are fully deployed to pricing. Watch also for the Flipkart Big Billion Days timing shift impact to clarify whether international eCommerce growth of 19% is structural or event-driven.
Source: the company’s 8-K filed 2026-08-20 with the SEC.
For the standing yardsticks on Walmart: the price tag, the filed record, and the four gauges, refreshed with each edition, see the BullScope Evidence Sheet: Walmart.
