Walmart shares fell sharply in premarket trading on Thursday despite the retailer reporting second-quarter earnings and revenue above analyst expectations.
The stock dropped about 8% before the market opened as investors focused on weaker-than-expected comparable sales growth across Walmart’s U.S. stores.
Walmart Beats Earnings Expectations
Walmart reported adjusted earnings per share of $0.81, beating the analyst consensus estimate of $0.74.
Quarterly revenue reached $187.9 billion, up 5.9% from a year earlier and ahead of the $186.75 billion expected by analysts.
The company also provided third-quarter adjusted earnings guidance of $0.62 to $0.64 per share.
The midpoint of $0.63 is slightly above the $0.62 reported during the same period last year.
Walmart Raises Full-Year Earnings Guidance
For fiscal 2027, Walmart increased its full-year adjusted earnings outlook.
The retailer now expects adjusted earnings per share between $2.80 and $2.87, compared with its previous forecast of $2.75 to $2.85.
The midpoint of the new range stands at $2.835, above the prior midpoint of $2.80.
U.S. Comparable Sales Miss Estimates
Despite the overall earnings beat, Walmart’s U.S. comparable sales disappointed investors.
Comparable sales at Walmart-only U.S. stores, excluding fuel, increased 2.6%, well below the consensus estimate of 3.67%.
That marked Walmart’s slowest U.S. sales growth in six years.
Mizuho analyst David Bellinger described the quarter as a particularly weak sales result and highlighted the size of the miss compared with recent expectations.
E-Commerce and Advertising Remain Strong
Other parts of Walmart’s business showed stronger momentum.
Global e-commerce sales increased 23%, supported by store-fulfilled pickup, delivery services and marketplace growth.
Walmart U.S. comparable sales were driven mainly by transaction growth, although the company faced an 80-basis-point headwind from its health and wellness segment.
Advertising was another strong area.
Walmart’s global advertising business grew 38%, while advertising revenue in the U.S. also increased 38%.
Walmart CEO Highlights Long-Term Progress
Walmart President and CEO John Furner said the company delivered another solid quarter and continues to make progress across its long-term growth initiatives.
Management remains focused on expanding areas such as digital commerce, advertising, marketplace services and customer experience.
Walmart Issues Q3 Sales Outlook
For the third quarter, Walmart expects net sales to grow between 3.0% and 3.75% in constant currency.
Adjusted operating income is projected to increase between 2% and 4%.
The retailer also warned of a headwind of more than 100 basis points related to the timing of Flipkart’s Big Billion Days promotion, which is shifting between the third and fourth quarters.
Fiscal 2027 Revenue Forecast Raised
Walmart also improved its full-year sales forecast.
The company now expects fiscal 2027 net sales to grow between 4% and 5% in constant currency, compared with its previous guidance of 3.5% to 4.5%.
The stronger outlook reflects continued growth across several areas of the business despite weaker U.S. comparable sales.
Profitability Improves as Tariff Refunds Help
Walmart’s gross profit rate increased by 96 basis points, with tariff refunds providing a significant benefit during the quarter.
Operating income rose 28.8%, while adjusted operating income increased 17.4% on a constant-currency basis.
Chief Financial Officer John David Rainey said Walmart plans to reinvest tariff refunds received during the second quarter into customer experience improvements and price investments during the second half of the year.
Walmart Stock Falls Despite Strong Headline Results
Walmart’s quarterly report delivered stronger-than-expected earnings, revenue growth and improved full-year guidance.
However, the miss in U.S. comparable sales overshadowed those positives and raised concerns about slowing domestic consumer demand.
Investors will now be watching whether Walmart can accelerate U.S. sales growth while maintaining momentum in e-commerce, advertising and operating profitability.
