Walmart Reports Strong Q2 Online Sales, But Store Results Disappoint Analysts

Walmart reported second-quarter earnings today. Photo by Justin Sullivan/Getty ImagesGetty ImagesWalmart Inc. announced its financial results for the second quarter of fiscal year 2027 and retail analysts were ...

August 20, 2026

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 in a call on Tuesday when it reported its Q2 2027 earnings. “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. Walmart missed analysts’ comp expectation of 3% to 3.5%.

The nation’s largest retailer earned $6.4 billion in net income in the three months ended July 31, better than the company’s earlier guidance. It also raised its forecast for the year and was able to meet the high end of its EBIT guidance.

Nonetheless, shares of Walmart are trending downward today in Nasdaq trading, hovering at around $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, used for weight loss, and more customers shopping online.

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Michael Lasser, senior analyst at UBS, said, that three things have driven Walmart’s stock, including the retailer’s core business, automation and technology, and rolling in new revenue streams with high margins.

“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 a research note. “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.”

“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,” the UBS note said.

Walmart is known as a proxy for the strength of consumer spending, and the American shopper is price-sensitive. As customers become more cautious and increasingly hunt for value, Walmart is no longer simply competing for budget-minded shoppers, it’s gaining consumers across income levels.

“Back-to-school and back-to college, we’re really pleased with," said Furner. "We’ve had share gains from higher-end consumers because of the brands we have – more elevated brands – that appeal to our customers. We saw strength in style, trend and toys.”

Investments in price are resonating with customers, Furner said, indicating that Walmart has incremental rollbacks on 11,000 items. “Our intention is to invest in price,” he said. “Meat department prices have been higher, so we invested in ground beef, because that’s important to our customers. We’re doing this because we think it has a lasting durable impact and engenders trust.”

John Harmon, CFA, Managing Director of Technology Research at Coresight Research, said Walmart is attracting affluent shoppers, including those earning $100,000-plus annually. "Consumers in all income brackets are seeking value,” he said. “Walmart is extremely well-positioned. Consumers are gravitating to retailers that provide value."

While Walmart faces near-term headwinds, the broader, long-term thesis remains in tact as the company continues to execute the key initiatives that underpin its long-term growth algorithm, UBS said. “We believe the company remains positioned to gain share, deepen customer engagement, and expand its alternate revenue streams.”

Walmart is using technology to its advantage. “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,” Harmon said, noting that Walmart has 2.1 million associates worldwide.

Supply chain investments are showing up in customer experiences, strengthening the economics of the retailer’s marketplace model. “When we invest in our supply chain, it helps get our products out to customers faster,” said Furner. “AI is faster, more convenient and personalized. We’re using AI to make our work easier.”

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 brands. In their quest for value, consumers have gravitated to Walmart.

“Target appears to be rebounding,” Harmon said. “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.”

With fiscal year 2026 revenue of $713 billion, the people-led, tech-powered omnichannel retailer, as it calls itself, has 280 million customers that visit its more than 10,900 stores and numerous ecommerce web sites in 19 countries.