TLDR
- Walmart posted Q2 adjusted EPS of $0.81, beating the $0.74 consensus, with revenue of $187.9 billion, up 5.9% year-over-year.
- Walmart-only U.S. comparable sales grew just 2.6%, missing the 3.67% estimate, the slowest U.S. sales growth in six years.
- WMT stock dropped around 7% in premarket, falling below where it started the year.
- Q3 adjusted EPS guidance came in at $0.62 to $0.64, with full-year EPS guidance raised to $2.80 to $2.87.
- Analysts at Jefferies, RBC, UBS, and Evercore ISI all maintained bullish ratings, calling the miss a macro issue, not a Walmart-specific problem.
Walmart (WMT) stock dropped roughly 7% in premarket trading on Thursday after the retailer posted U.S. comparable sales growth of 2.6%, well below the 3.67% consensus estimate. That miss sent the stock below where it began the year.
The company reported Q2 adjusted earnings per share of $0.81, topping the $0.74 analyst estimate. Revenue came in at $187.9 billion, up 5.9% year-over-year and above the $186.75 billion forecast.
Despite the headline beat on earnings, the U.S. comp sales number did most of the damage. Mizuho analyst David Bellinger called it a “worst-case scenario” and “one of the biggest misses in years from WMT.”
Management pointed out that comparable sales were actually 3.4% when excluding health and wellness, which was hit by pharmacy-related deflation tied to maximum fair price regulation.
Walmart also said it is actively cutting prices to gain more market share, framing the sales deceleration as a reinvestment choice rather than a demand problem.
What the Bulls Are Saying
Jefferies analyst Corey Tarlowe kept his Buy rating, citing continued transaction growth, broad-based market share gains, and strength in e-commerce, advertising, marketplace, and membership.
RBC Capital analyst Steven Shemesh noted Walmart delivered close to 10% operating profit growth excluding tariff refunds. He called the slowdown a “broader macro dynamic” rather than a sign that Walmart’s share gains are easing.
UBS analyst Michael Lasser said the print is likely to stir debate but his firm stays bullish. Evercore ISI analyst Greg Melich kept his Outperform rating and noted that full-year sales guidance was raised to 4.0% to 5.0%, up from 3.5% to 4.5%.
Growth Areas Still Holding Up
Global eCommerce sales grew 23%, driven by store-fulfilled pickup, delivery, and marketplace. Walmart’s global advertising business surged 38%, with U.S. advertising also up 38%.
Operating income rose 28.8%, or 17.4% on an adjusted constant currency basis. Gross profit rate increased 96 basis points, partly driven by tariff refunds received in Q2.
CFO John David Rainey said the company plans to put those tariff refunds into customer experience and price investments in the second half.
For Q3, Walmart expects net sales growth of 3.0% to 3.75% in constant currency. The company flagged a headwind of over 100 basis points tied to a timing shift of Flipkart’s Big Billion Days between Q3 and Q4.
Full-year fiscal 2027 adjusted EPS guidance was raised to $2.80 to $2.87, from a prior range of $2.75 to $2.85.
“Our team delivered another good quarter, and we continue to make steady progress on the long-term value drivers of our business,” said Walmart U.S. President and CEO John Furner.
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