Walmart Inc. WMT reported second-quarter fiscal 2027 results, wherein both top and bottom lines surpassed the Zacks Consensus Estimate. Results benefited from e-commerce, advertising and membership growth, along with tariff refunds, partly offset by price investments.
Walmart’s Quarterly Metrics: Key Insights
Adjusted earnings were 81 cents per share, up 19.1% from the year-ago quarter’s 68 cents. The bottom line beat the Zacks Consensus Estimate of 73 cents. Reported earnings per share were 80 cents compared with 88 cents in the prior-year quarter.
Total revenues increased 5.9% year over year to $187.9 billion and topped the Zacks Consensus Estimate of $186.3 billion. On a constant-currency basis, revenues rose 5.1%. Net sales jumped 5% at cc, backed by strength in all units.
Global e-commerce sales advanced 23%, driven by store-fulfilled pickup and delivery services along with marketplace expansion. Walmart’s global advertising business rose 38%, while Walmart U.S. advertising revenues increased 38%. Global membership fee revenues climbed 17%.
The consolidated gross profit rate improved 96 basis points (bps) year over year to 25.4%. Walmart U.S. led the improvement, primarily due to tariff refunds, while favorable business mix from global advertising also helped. Price investments and higher fuel costs in distribution and fulfillment partly offset the gains. Adjusted operating income at constant currency rose 17.4% to $9.25 billion.
Decoding Walmart’s Segmental Performance
Walmart U.S.: Net sales increased 3.5% year over year to $125.2 billion. Comparable sales, excluding fuel, rose 2.6%, driven by a 1.5% increase in transactions and a 1.1% rise in average ticket. E-commerce contributed roughly 510 bps to comp sales growth. E-commerce sales surged 24%, supported by approximately 43% growth in store-fulfilled delivery, strong marketplace expansion and advertising momentum.
Marketplace sales rose nearly 52%. Expedited deliveries completed in less than three hours represented around 37% of store-fulfilled orders. Walmart Connect revenues increased 43% excluding VIZIO.
Operating income increased 20.6% to $8.1 billion, benefiting from higher gross profit, improved e-commerce economics and higher Walmart+ membership fee revenue.
Walmart International: Net sales increased 12.8% year over year to $35.2 billion. On a constant-currency basis, sales rose 7.9%. Currency fluctuations positively impacted reported sales by roughly $1.5 billion. E-commerce sales advanced 19%, led by store-fulfilled pickup and delivery services. Membership income increased 28%. The advertising business grew 20%, fueled by Flipkart Ads.
China remained a standout market, with net sales in constant currency increasing 20.7% and e-commerce sales growing 26%.
Operating income increased 16.6% to $1.4 billion. On a constant-currency basis, operating income rose 5.7%, benefiting from lower e-commerce losses and favorable business mix changes across markets.
Sam’s Club U.S.: Net sales increased 8.8% year over year to $25.7 billion, while net sales excluding fuel rose 4.5%. Comparable sales excluding fuel grew 4.4%, supported by a 7% increase in transactions despite a 2.5% decline in average ticket. E-commerce sales rose 26%, driven by continued strength in club-fulfilled pickup and delivery. E-commerce contributed around 450 bps to comparable sales growth and represented roughly 20% of net sales excluding fuel.
Membership and other income increased 6%, aided by growth in member counts and Plus memberships.
Adjusted operating income edged up 23.3% to $678 million, reflecting benefits from tariff refunds and continued strong membership growth. Adjusted operating income growth also excluded the impact of discrete reorganization charges recorded in the prior-year period.
Walmart’s Financial Position
Walmart ended the quarter with cash and cash equivalents of $11.5 billion and total debt of $57.2 billion. For the six months ended July 31, operating cash flow increased to $19.7 billion.
During the quarter, share repurchases totaled $3 billion for 25.7 million shares at an average price of $117.61 per share. The remaining repurchase authorization was $25.1 billion.
What to Expect From Walmart in Q3 & FY27?
For the third quarter of fiscal 2027, Walmart expects net sales growth of 3-3.75% at cc and operating income growth of 2-4% at cc. Adjusted earnings per share are projected in the range of 62-64 cents.
Management raised fiscal 2027 guidance, calling for net sales growth of 4-5% at cc, compared with the prior forecast of 3.5-4.5%. The adjusted operating income is expected to increase 7-8.5% at cc for the year, up from the previous outlook of 6-8%.
Walmart now expects adjusted EPS for fiscal 2027 to be in the $2.80-$2.87 range compared with prior guidance of $2.75-$2.85.
Shares of this Zacks Rank #3 (Hold) company have gained 3.5% in the past month compared with the industry’s growth of 3.3%.
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Walmart Inc. (WMT): Free Stock Analysis Report
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Urban Outfitters, Inc. (URBN): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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