Walmart Posts Healthy Quarter, Raises Its 2026 Outlook but Stock Falls

Walmart Posts Healthy Quarter, Raises Its 2026 Outlook but Stock Falls

David Moin

Thu, August 20, 2026 at 11:35 AM GMT+3 7 min read

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Updated 4:26 p.m. ET on Aug. 20

Walmart posted another healthy quarter, highlighted by double-digit growth in e-commerce and increased profitability, prompting the company to raise its outlook for the year — although a more cautious outlook for the third quarter sent the retailer's shares down by more than 9 percent.

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Gains came despite consumers struggling with inflation across most sectors, particularly food, gas and housing costs, though their spending all year has been resilient.

The world's largest retailer reported that for the second quarter ended July 31, revenues rose 5.9 percent to $187.9 billion, from $177.4 billion in the year-ago quarter. On a constant currency basis, revenues were up 5.1 percent to $186.4 billion from $177.4 billion in the year-ago period.

Operating income rose 28.8 percent to $9.4 billion, from $7.3 billion in the year-ago period. This figure includes the impact of tariff refunds received, partially offset by price investments in the quarter. "Setting aside this net impact, underlying operating income growth was at the top end of our guidance," Walmart stated.

On a constant currency basis, operating income rose 17.4 percent to $9.2 billion, from $7.9 billion in the year-ago period.

Earnings per share were down 9.1 percent to $0.80, from $0.88 in the year-ago quarter. On an adjusted basis, earnings per share rose 19.1 percent to $0.81, from $0.68 in the year-ago period.

Global e-commerce sales grew 23 percent, led by store-fulfilled pick up and delivery, and marketplace.

"Our team delivered another good quarter, and we continue to make steady progress on the long-term value drivers of our business," John Furner, Walmart's president and chief executive officer, said in a statement Thursday. "Our multiyear growth in e-commerce is evidence that customers are choosing Walmart because we deliver price, speed and convenience across a broad assortment. At Walmart, they can have it all."

For 2026 overall, Walmart is now projecting net sales on a constant currency basis to increase 4 to 5 percent, up from an earlier forecast of 3.5 to 4.5 percent.

Adjusted operating income as a percentage of sales is now projected at 7 to 8.5 percent, up from a previous forecast of 6 to 8 percent.

Earnings per share are estimated at $2.80 to $2.87, up from the previous forecast of $2.75 to $2.85.

Last year, Walmart generated net sales of $706.4 billion, adjusted operating income of $31 billion, and adjusted earnings per share of $2.64.

However, the company maintained its guidance for the third quarter of this year, and continues to expect net sales to rise 3 to 3.75 percent, operating income up 2 to 4 percent, and adjusted earnings per share of $0.62 to $0.64.

In a breakout of divisions, Walmart U.S. sales in the second quarter rose 3.5 percent to $125.2 billion, from $120.9 billion in last year's quarter. Comp sales, excluding fuel, rose 2.6 percent. Changes in regulation around maximum fair pricing for certain drugs negatively impacted comp sales by 125 basis points.

Walmart International's sales rose 12.8 percent to $35.2 billion, from $31.2 billion a year ago.

Sales at Sam's Club rose 8.8 percent to $25.7 billion, from $23.6 billion.

The second-quarter results beat Wall Street's expectations of earnings per share of 74 cents, on revenues of $186.82 billion, but there was some concern among industry analysts that while the outlook for the year was raised, the third-quarter outlook was unchanged and there was some deceleration in comp growth at Walmart U.S. Walmart's stock price was down 9.15 percent to $103.84 in trading on Thursday, which was also when the DOW fell 700 points.

"Walmart's top-line performance has been as resilient as the U.S. consumer, but investor sentiment wavered after the company held to its conservative guidance last quarter, and the slightly raised outlook may not be sufficient to restore confidence," wrote Emarketer principal analyst Sky Canaves.

"Walmart's e-commerce growth decelerated slightly in [the second quarter], when it would have been expected to move in the opposite direction as a result of Amazon shifting Prime Day to June and Walmart's [shifting] its summer sale to line up with its rival's. [E-commerce rose 26 percent in the first quarter versus 23 percent in the second quarter.] The e-commerce contribution to Walmart's growth in the key U.S. market is becoming increasingly critical. The gap between e-commerce gains and declining in-store sales is growing, and the impact of lower prescription drug prices is only part of this story, the strains on Walmart's core customer are the more important part," Canaves wrote.

UBS reported, "Although Walmart missed the market's comp expectation of 3 percent to 3.5 percent, we do not view the investment thesis as structurally changed.…We anticipate that this quarter's results are likely to illicit a negative stock price reaction. To us, this represents a good opportunity as expectations are now rebased. Our broader takeaway from the release is that while Walmart faces near-term headwinds, the broader long-term thesis remains intact as the company continues to execute the key initiatives that underpin its long-term growth algorithm."

Walmart U.S. comp sales in the second quarter grew 2.6 percent, versus 4.1 percent in the first quarter this year. The division faced headwinds due to fair price regulation in pharmaceuticals, and the benefit of sales of GLP-1 was half of what it was last year.

David Silverman, senior director, Fitch Ratings, wrote that Walmart "will continue to be a long-term retail winner, although we recognize some near-term concerns that will likely remain top of focus in the coming quarters." Silverman cited the slowdown in U.S. comparable store sales. "The company pointed to some mandated pricing declines in the pharmacy and efforts to reduce prices across the business to remain competitive in an environment with choppy consumer sentiment," he wrote. "The company also received close to $2.9 billion in tariff refunds in the quarter, which supported profits."

"The underlying business continued to perform well in the quarter, and was largely in line with our expectations, which assumed a slight moderation in sales growth from the first quarter," Furner said during a conference call with industry analysts, where he cited market share gains, growth in unit transactions, e-commerce gains and membership fee revenue at an all-time high growing 17 percent.

"I feel good about how the underlying business is performing," Furner said. "The team delivered strong sales growth in categories like toys, pantry and fresh, and we continue to see growth from higher income households….If you look at the profit drivers of our business, almost half of the growth came from areas like membership, advertising, marketplace, and we expect this to continue," Furner said.

"As we said coming out of [the first quarter], customers tell us they're still feeling some pressure, but it's clear customers are looking for value and convenience, and they want things fast, and that's where Walmart shines. Having the best prices across a basket of goods helps us continue to build trust with our customers, and members by helping them save money at a time when many households are carefully managing their budgets." At Walmart U.S, there were rollbacks on 11,000 items during the quarter, up from 7,200 rollbacks at the end of the first quarter. "There is elasticity on these items that we roll out," Furner said.

E-commerce gains are partly being fueled by faster deliveries. "We've now expanded sub-30-minute delivery into 38 markets in the U.S., giving millions of additional customers access to faster fulfillment," Furner said. "Customers who use fast delivery shop with us more frequently. They deepen engagement with us, and are more likely to become Walmart Plus members."

Furner said Walmart's food offering is expanding with "meal solutions, prepared food partnerships like the one we announced with Subway. Faster fulfillment allows us to participate in a much broader share of everyday food spending."

In other growth manuevers, Walmart's online marketplace recently expanded into Mexico and Canada, and there were investments in automation, technology and fulfillment capacity "allowing us to move inventory more efficiently, deliver faster, help with in-stock levels, and support the growth of both our first party, and marketplace businesses."

AI, he added, "is helping make Walmart faster, more convenient and personalized. We continue to take a people-led tech powered approach…We believe AI will improve nearly every part of our business by making shopping better, and our associates work easier. The number of customers using Sparky [Walmart's AI-power shopping assistant] is up 70 percent from last year." Those using Sparky spend 40 percent more per order than those who don't.

During the call, Dave Guggina, president and CEO of Walmart U.S., said, "We're very pleased with the team's progress in general merchandise," citing strength in style, trend, fashion, toys and private fashion brands Scoop and Free Assembly. For back-to-college, candles, throws, rugs and lamps were strong. "Walmart sells roughly 50 percent of total industry school supplies from a unit standpoint over the season, and we're very pleased with where we are at this point in the year. Customers are responding to just absolutely fantastic investments in price. We have a list of 14 key items that are priced lower."

In other key statistics, global inventory was up 6.7 percent, or 6 percent on a constant currency basis, "due to strategic initiatives and inflation," the retailer indicated. Operating cash flow reached $19.7 billion, an increase of $1.4 billion, and free cash flow reached $5.5 billion, a decrease of $1.4 billion.

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