Key Highlights

  • Walmart's Q2 FY27 Revenue rose 5.9% to $187.9 billion, while global E-commerce grew 23% and Advertising 38%, per its Aug. 20, 2026 release.
  • GAAP Operating Income rose 28.8% to $9.38 billion; adjusted EPS was $0.81 and full-year adjusted EPS guidance is $2.80 to $2.87.
  • Shares still fell 9.15% on Aug. 20 as third-quarter guidance pointed to slower growth of 3% to 3.75% in sales and 2% to 4% in operating income.
  • Walmart moved its stock listing from the New York Stock Exchange to Nasdaq in December 2025, and shares had recovered to $110.12 by Sept. 22 from the $103.84 close on results day.

Walmart's (NASDAQ:WMT) second-quarter report showed a retailer whose digital businesses are now doing much of the heavy lifting on profit. In results released Aug. 20, 2026, for the quarter ended in July, the company said global e-commerce sales rose 23%, advertising revenue climbed 38% and membership income grew 17%. Together, those fast-growing lines helped GAAP operating income jump 28.8% on revenue growth of just 5.9%.

That gap between sales growth and profit growth explains the headline. Walmart is using online orders, delivery, its advertising network and paid memberships to widen margins on top of a large but slower-growing store base. The company set its fiscal 2027 outlook at adjusted Earnings of $2.80 to $2.87 per share, adjusted operating income growth of 7% to 8.5% and constant-currency net sales growth of 4% to 5%.

Investors were not satisfied. Walmart shares fell 9.15% on Aug. 20 to $103.84. No single trigger for the decline was confirmed in the sources reviewed. The report did carry caveats, however: U.S. comparable sales growth was a modest 2.6%, and third-quarter guidance points to slower growth in both sales and operating income. The shares had recovered to $110.12 by Sept. 22.

Breaking Down the 23% E-Commerce Surge

The e-commerce gains were broad across Walmart's three operating segments. According to the company's earnings release, filed with the Securities and Exchange Commission, e-commerce sales rose 24% at Walmart U.S., 26% at Sam's Club U.S. and 19% at Walmart International. Global e-commerce growth came to 23%.

Chief Executive John Furner tied the performance to Walmart's core value proposition. "Our multi-year growth in eCommerce is evidence that customers are choosing Walmart because we deliver price, speed, and convenience," he said in the release.

Much of that growth comes from store-fulfilled pickup and delivery. Walmart uses its US stores as local fulfillment points, so rising order density lowers the cost per delivery. That dynamic has turned e-commerce from a drag on profitability into a contributor.

Advertising and Membership: The High-Margin Engines

The more direct driver of profit is what sits around the e-commerce business. Walmart's global advertising Business grew 38% in the quarter, and Walmart U.S. advertising also rose 38%. Retail media, which lets brands pay to reach shoppers on Walmart's website, app and in-store screens, carries far higher margins than selling groceries. It scales naturally as more customers shop digitally.

Membership and other income, which includes Walmart+ and Sam's Club fees, rose 17% globally. Membership revenue is recurring and highly profitable, and members tend to shop more often, which in turn feeds e-commerce Volume and advertising reach.

These higher-margin streams help explain why adjusted operating income rose 17.4% in constant currency, roughly three times the rate of revenue growth. They are the main reason the company can guide to full-year adjusted operating income growth of 7% to 8.5%, well ahead of its 4% to 5% sales growth target.

Second-Quarter Results in Detail

For the second quarter of fiscal 2027, Walmart reported total revenue of $187.9 billion, up 5.9%, or 5.1% in constant currency. GAAP operating income was $9.38 billion, up 28.8%. GAAP Earnings Per Share were $0.80 and adjusted earnings per share were $0.81.

At Walmart U.S., comparable sales excluding fuel rose 2.6%. The company said growth was driven by higher transactions but partly offset by a headwind of about 80 basis points from the health and wellness category. In practice, that means traffic held up even as one category weighed on the comparison.

For the full fiscal year ending January 2027, Walmart guided to the following:

  • Net sales growth: 4.0% to 5.0% in constant currency.
  • Adjusted operating income growth: 7.0% to 8.5%.
  • Adjusted EPS: $2.80 to $2.87.

For the third quarter, it expects net sales growth of 3.0% to 3.75%, operating income growth of 2.0% to 4.0% and adjusted EPS of $0.62 to $0.64.

Pricing, Tariffs and the Competitive Field

At the Goldman Sachs (NYSE:GS) Global Consumer and Retail Conference on Sept. 18, Walmart U.S. Chief Executive David Guggina said Inflation in Walmart's basket was roughly 1.4% in the first half and fell below 1% in the third quarter as price investments took effect. He also said Walmart received $2.9 billion in Tariff refunds in the second quarter and reinvested them in about 11,200 price rollbacks.

Walmart, which moved its stock listing from the New York Stock Exchange to Nasdaq in December 2025, now shares an index with the technology companies it increasingly competes with for advertising dollars.

Walmart's closest rival in e-commerce is Amazon (NASDAQ:AMZN), which dominates US online retail and runs the largest retail media business. Walmart's edge lies in groceries, where its store network allows same-day delivery of fresh and frozen items at scale, and in a price-focused customer base that has broadened to include more higher-income households. Costco (NASDAQ:COST) competes with Sam's Club in membership Warehouse retail, and Target (NYSE:TGT), Kroger (NYSE:KR) and dollar-store chains compete for everyday spending.

Risks Behind the Profit Story

  • Slowing near-term growth: Third-quarter guidance for 3% to 3.75% sales growth and 2% to 4% operating income growth implies a deceleration from the second quarter.
  • Health and wellness drag: The 80-basis-point headwind in U.S. comparable sales shows how one category can weigh on results.
  • Consumer and trade pressures: Tariffs, food inflation and pressure on lower-income households could affect both costs and demand.
  • Competition in digital advertising: Amazon and other retailers are expanding retail media, which could limit Walmart's pricing power with advertisers.
  • Valuation: The forward price-to-earnings ratio is near 37 times, a premium that left little room for disappointment, as the Aug. 20 sell-off showed.

Whether the Digital Engine Keeps Powering Profit

The next major checkpoint is Walmart's third-quarter fiscal 2027 report, which the company has historically released in mid-November; the exact date should be confirmed on its Investor relations calendar. Investors will look for whether e-commerce growth stays above 20%, whether advertising keeps growing at a rate in the high 30s, and whether the health and wellness headwind in U.S. comparable sales eases.

Analysts remain broadly positive, with a consensus Strong Buy rating from 29 Buy and three Hold ratings and an average price target of $128.27. Any revision to the $2.80 to $2.87 adjusted EPS range, up or down, will show how much the digital businesses are adding to profit. For now, the second-quarter numbers suggest that Walmart's profit story rests increasingly on its digital and advertising businesses rather than on store traffic alone.