TLDR
- Walmart’s shares plummeted by 4.35% despite revenue reaching $177 billion, with e-commerce soaring by 25%.
- Robust sales figures contrast with diminished income, as Walmart’s earnings come under pressure from rising costs.
- While experiencing global growth and a surge in digital sales, Walmart’s profit margins remain heavily strained.
- Though revenue of $177 billion offers some buoyancy, issues such as tariffs and costs significantly erode profitability.
- U.S. eCommerce rose by 26%, yet overall income faced an 8.2% decline due to elevated global expenditures.
In early trading on Thursday, Walmart’s stock experienced a notable decline of 4.35%, settling at $98.11 by 10:05 AM EDT.
This decline occurred in the wake of the company unveiling substantial revenue and impressive digital sales growth in its fiscal 2026 second-quarter results. Following an initial opening around $103, the stock faced pronounced downward pressure during morning trading.
Strong Revenue and eCommerce Growth Offset by Income Pressure
Walmart unveiled second-quarter revenue amounting to $177.4 billion, reflecting a year-over-year growth of 4.8%. Adjusted for constant currency, revenue exhibited an even sharper increase of 5.6% for the quarter. Nevertheless, the company’s operating income plummeted by 8.2% to $7.3 billion, only partially mitigated by a 0.4% improvement when factoring in currency adjustments.
Walmart, $WMT, Q2-26. Results:
Adj. EPS: $0.68
Revenue: $177.4B
Net Income: $7.03B
eCommerce sales jumped 25% globally, bolstered by robust performance in pickup & delivery alongside Walmart Connect. pic.twitter.com/sMled8rKkV— EarningsTime (@Earnings_Time) August 21, 2025
eCommerce emerged as a pivotal facet of growth, amassing a global increase of 25%. In the United States, e-commerce sales surged by 26%, with store-fulfilled deliveries escalating by nearly 50%. This momentum propelled comparable sales in the U.S. by 4.6%, driven by escalating receipts and augmented transaction volumes.
The global advertising sector also thrived, achieving a remarkable 46% increase. Walmart Connect, its U.S. advertising segment, grew by 31%, underscoring the significance of digital monetization. However, the decline in operating income cast a long shadow on the overall achievement.
International Expansion and Investments Drag Profit Margins
Walmart’s net sales ascended by 5.5%, with a 10.5% uplift in constant currency. Key markets, including China, Mexico, and India, fueled these gains, particularly through platforms such as Flipkart and Walmex. Nonetheless, increased investment outlays in these territories adversely impacted profit margins in the segment.
Operating income from the international division contracted by 9.8% in the quarter. Strategic expenditures on technology and infrastructure in India, Canada, and Mexico were identified as primary factors. Such investments align with Walmart’s vision for expanding and modernizing its global presence.
Walmart maintains a steadfast commitment to international markets. Its solid balance sheet features $9.4 billion in cash and cash equivalents, allowing the conglomerate to focus on scaling operations for sustainable, long-term growth.
Tariff Costs, Consumer Behavior Changes Add Pressure
Walmart executives acknowledged heightened tariff exposure across the product mix, resulting in ongoing cost increases anticipated to persist in forthcoming quarters. CFO John David Rainey indicated that markup pressures, while softer than projected, remain tangible.
The company observed a growing price sensitivity, particularly among lower and middle-income consumers. Many are avoiding discretionary spending or opting for more affordable alternatives, placing additional strain on high-margin product segments.
Walmart has repurchased 67.4 million shares this fiscal year, accumulating costs of $6.2 billion. Operating cash flow rose to $18.4 billion, while free cash flow reached $6.9 billion. Despite persistent macroeconomic challenges, the company remains optimistic regarding its strategic direction.
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