Walmart reported second-quarter earnings today. Photo by Justin Sullivan/Getty Images
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Walmart Inc. announced its financial results for the second quarter of fiscal year 2027 and retail analysts were not impressed, despite some impressive metrics. Total revenue rose 5.9% in the second quarter, while operating income lept 28.8%. The retailer posted solid sales and profits in the most recent quarter, aided by online spending, which had a 23% gain, and a massive $2.9 billion tariff refund, the largest reported yet.
“We haven’t had this kind of growth in two decades,” said Walmart president and CEO John Furner. “It’s different, it’s being driven by advertising, membership and data services. Consumers are shopping at the counter, the curb or the home. Advertising continues to grow at a 40 percent clip.”
But store sales disappointed investors as consumers pulled back in the face of higher gas prices.
The nation’s largest retailer earned $6.4 billion in net income in the three months ending July 31, better than the company’s earlier guidance. It also raised its forecast for the year.
Nonetheless, shares of Walmart were trending downward today on Nasdaq, hovering at $103.65, down 9.32 percent after sales growth at U.S. stores, excluding fuel, rose only 2.6% in the quarter compared to 4.6% a year ago. Sales in part were impacted by lower prices for the class of drugs known as GLP-1’s for weight loss, and more customers shopping online.
“Although Walmart missed the market’s comp-store sales expectation of 3% to 3.5%, we do not view the investment thesis as structurally changed,” said UBS. “In fact, the company was able to meet the high end of its EBITDA guidance of 10%, even when netting out of the impact of tariff refunds.”
Walmart is known as a proxy for the strength of consumer spending even in the face of a price-sensitive American shopper. As customers become more cautious and increasingly hunt for value, Walmart is no longer just competing for the budget-minded shopper. It’s gaining consumers across income levels, including those earning $100,000-plus annually, according to John Harmon, CFA, Managing Director of Technology Research at Coresight Research.
“Consumers in all income brackets are seeking value,” said Harmon. “Walmart is extremely well-positioned. Consumers are gravitating to retailers that provide value. Walmart is also using technology to its advantage.
“It’s not fair to expect Wamart to become an AI expert,” said Harmon. “We’ve seen some AI companies grow 80% year-over-year. Walmart has 25,000 associates working on AI. That’s an army of associates. AI has massive programming capabilities, and is extremely fast and productive.”
Walmart has 2.1 million associates worldwide.
Walmart has been devoting energy to its private label business with brands such as Scoop and Terra and Sky, a plus-size women’s apparel line.
“Retailers have been focusing on growing their private label businesses,” said Harmon. “Walmart has a lot of private label lines. In their quest for value, consumers have gravitated to Walmart. Target appears to be rebounding. Its first quarter results were good. If you look at Target’s guidance for the year, full-year net sales growth in the range of 5 percent, up 1 percent. Walmart is up 5.9%. Target moving toward Walmart’s range.”
Walmart Inc. which calls itself a people-led, tech-powered omnichannel retailer, has 280 million customers each week visiting more than 10,900 stores and numerous ecommerce web sites in 19 countries.
With fiscal year 2026 revenue of $713 billion, Walmart, corporate.walmart.com employs about 2.1 million associates worldwide.