10-QPeriod: Q2 FY2027

Walmart Inc. Quarterly Report for Q2 Ended Jul 31, 2026

Filed August 28, 2026For Securities:WMT

Summary

Walmart Inc. reported solid revenue growth for the second quarter and first half of fiscal year 2026, with total revenues increasing by 5.9% and 6.6% respectively. This growth was primarily driven by strong comparable sales across its U.S. segments and international markets, supported by a significant boost from eCommerce, particularly store-fulfilled delivery. The company also benefited from a substantial $2.9 billion in tariff refunds received during the quarter, which positively impacted gross profit margins. However, increased operating expenses, attributed to higher self-insured general liability claims, depreciation, and associate healthcare costs, partially offset the gains. Net income saw a decrease of $0.6 billion for the quarter compared to the prior year, though it increased slightly for the first half. This was influenced by a notable decrease in 'Other (gains) and losses,' which swung from a gain in the prior year to a loss in the current period, primarily due to changes in the fair value of investments. Despite this, the company's commitment to everyday low prices remains evident, supported by ongoing investments in technology and strategic capital expenditures aimed at enhancing its omnichannel capabilities and supply chain efficiency.

Key Highlights

  • 1Total revenues increased by 5.9% to $187.9 billion for the three months ended July 31, 2026, and by 6.6% to $365.7 billion for the six months ended July 31, 2026.
  • 2Walmart U.S. comparable sales grew by 3.3% for the quarter and 3.8% for the six months, driven by grocery strength and e-commerce contributions.
  • 3The company received approximately $2.9 billion in tariff refunds, significantly boosting gross profit margins.
  • 4Operating income increased by 28.8% to $9.4 billion for the quarter and by 17.0% to $16.9 billion for the six months, reflecting improved gross profit and a favorable comparison to prior period legal charges.
  • 5Diluted earnings per share attributable to Walmart decreased to $0.80 for the quarter, down from $0.88 in the prior year, but increased to $1.46 for the six months from $1.43 in the prior year.
  • 6Capital expenditures increased by $2.8 billion to $14.2 billion for the six months ended July 31, 2026, primarily for supply chain and customer-facing initiatives.
  • 7Free cash flow for the six months decreased to $5.5 billion from $6.9 billion in the prior year, mainly due to higher capital expenditures.

Frequently Asked Questions

Walmart's total revenues increased due to strong comparable sales across its U.S. segments and international markets, driven by growth in transactions. E-commerce net sales also contributed significantly, with store- and club-fulfilled delivery being key drivers. Favorable currency exchange rate fluctuations also positively impacted net sales.

The approximately $2.9 billion in tariff refunds received during the quarter significantly boosted Walmart's gross profit rate. These refunds were recorded as a reduction to cost of sales and were partially used for price investments, with a continued prioritization expected for fiscal year 2027.

Operating expenses increased primarily due to higher self-insured general liability claims, increased depreciation related to capital investments, and higher associate healthcare benefit costs driven by increased enrollment and medical cost inflation. These increases were partially offset by lapping charges from certain legal matters in the prior year.

Walmart continues to prioritize capital allocation towards high-return areas like supply chain, customer-facing initiatives, and technology. Capital expenditures increased significantly for the six months ended July 31, 2026. Consequently, free cash flow for the same period decreased due to these higher investments, although net cash provided by operating activities saw an increase.