Walmart Stock Slides 6% Despite Earnings Win. Here’s Why

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TLDR

• Walmart posted Q2 adjusted EPS of $0.81, beating the $0.74 analyst estimate

• Revenue came in at $187.9 billion, up 5.9% year-over-year, topping forecasts

• U.S. comparable sales grew just 2.6%, missing the 3.67% consensus estimate

• Full-year adjusted EPS guidance was raised but came in below analyst expectations

• WMT stock fell 6% in premarket trading Thursday

Walmart stock dropped 6% in premarket trading Thursday after the retailer’s U.S. comparable sales growth came in well below what Wall Street was expecting, despite beating on earnings and revenue.

WMT was trading around $107.40 in premarket, down from $114.30.

Walmart Inc., WMT

Adjusted EPS for the second quarter came in at $0.81, beating the analyst consensus of $0.74. Revenue reached $187.9 billion, up 5.9% year-over-year, topping the $186.75 billion estimate.

The problem was comparable sales. Walmart-only U.S. stores saw comp sales grow just 2.6%, well short of the 3.67% consensus estimate. That marks the slowest U.S. sales growth in six years.

Mizuho analyst David Bellinger called it a “worst-case scenario” and “one of the biggest missed in years from WMT.”

Walmart has had a tough summer. The stock was already down roughly 15% since its previous earnings report in mid-May, weighed down by concerns over lower-income consumer spending and pressure from the Iran War-related inflation.

The company is receiving billions in tariff refunds, but CFO John David Rainey said those funds will go toward price cuts and customer experience investments rather than boosting margins.

Gross profit rate increased 96 basis points, while operating income rose 28.8%. On an adjusted constant currency basis, that figure was 17.4%.

Bright Spots

Global eCommerce sales grew 23%, driven by store-fulfilled pickup, delivery and marketplace growth. Global advertising revenue surged 38%, with Walmart U.S. advertising up the same amount.

“Our team delivered another good quarter, and we continue to make steady progress on the long-term value drivers of our business,” said John Furner, President and CEO of Walmart.

Guidance Raised, But Not Enough

For fiscal 2027, Walmart raised its full-year adjusted EPS guidance to a range of $2.80 to $2.87, up from $2.75 to $2.85 previously. Net sales are now expected to grow 4% to 5% in constant currency, up from prior guidance of 3.5% to 4.5%.

Analysts were looking for $2.90 per share and 5.5% sales growth. The raised guidance still fell short on both counts.

For Q3, Walmart guided net sales growth of 3% to 3.75% and adjusted operating income growth of 2% to 4%. The company flagged a headwind of over 100 basis points tied to a timing shift of Flipkart’s Big Billion Days between Q3 and Q4.

Despite the selloff, Wall Street remains broadly supportive. Of 45 analysts tracked by FactSet, all but seven are bullish on Walmart, with an average price target of nearly $140.