Walmart reported fiscal second quarter results that exceeded Wall Street revenue expectations while raising its annual sales and earnings guidance, yet investors reacted negatively to the company’s quarterly comparable sales performance and forward projections.
The retailer posted quarterly revenue of $187.94 billion, up from $177.40 billion in the year-earlier period, representing 5.9% growth. U.S. comparable sales increased 2.6%, falling short of Wall Street’s anticipated 3.5% gain according to FactSet. E-commerce sales jumped 23% globally, and total net income reached $6.37 billion, or 80 cents per share. The company’s gross profit rate expanded to 25.4%, benefiting from tariff refund credits. CFO John David Rainey stated that Walmart received approximately $2.9 billion in tariff refunds and planned to deploy these funds toward consumer price reductions in the coming quarter.
Looking ahead, Walmart raised its full-year net sales growth guidance to between 4% and 5%, compared with previous expectations of 3.5% to 4.5% growth. Adjusted earnings per share guidance moved to between $2.80 and $2.87, up from the prior range of $2.75 to $2.85. For the third quarter specifically, the company expects net sales to grow between 3% and 3.75% with adjusted earnings per share between 62 cents and 64 cents. However, Walmart noted anticipated incremental cost headwinds exceeding $2 billion from elevated fuel prices throughout the year.
Despite the improved outlook, a headwind emerged from the company’s health and wellness segment, which experienced a 0.8% decline as drug price caps took effect. Rainey emphasized that consumers remain financially stretched due to elevated fuel and food expenses, though spending continues and real wage growth provides support. The company is deploying price reductions across multiple categories, including beef. Walmart’s performance was supported by growth in e-commerce, pickup and delivery services, its third-party marketplace, and advertising revenue, which climbed 38% globally. Membership fee revenue increased 17%, with Walmart+ adding a record number of subscribers for a second consecutive quarter.
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