Walmart also posted strong results in the second quarter of fiscal 2027, beating Wall Street expectations in revenue, adjusted earnings per share and net income. And while the retail giant has also been investing in digital sales, worldwide eCommerce sales were up 23%.
Walmart posted revenue of $187.9 billion for the quarter, which was up 5.9 percent from the year-earlier period and also a 14.7 percent increase from the previous quarter.
The company’s adjusted earnings per share was $0.81, which was above the consensus estimate of $0.74. Adjusted EPS improved 19% year-on-year and the company is able to increase its profit as well as revenue.
Net income stood at about $6.5 billion, beating the estimated $5.91 billion. Walmart's relatively robust revenue and earnings also give a good quarter in a year when it is expanding away from bricks and mortar retail.
Walmart's global eCommerce performance was one of the biggest highlights in the quarter. Global eCommerce sales grew 23 percent year-over-year, reflecting the continuing popularity of online shopping, delivery services and Walmart's digital marketplace.
With growing advertising revenues worldwide, the company also saw a 38% increase. Walmart’s retail media operations enable brands and suppliers to get consumers to their products, with a high margin revenue stream that traditional retail can’t match.
Membership revenue is strong. Global membership fee revenue was up 17%, another sign of the continuing interest in Walmart’s membership offering and related benefits.
Strong performance across Walmart's Segments.
Walmart's individual operating segments also showed good growth.
Walmart U.S. generated $125.2 billion in segment net revenue, up 3.5 percent year-over-year. U.S. comparable sales increased 2.6 percent excluding fuel, and consumers continued to spend in Walmart's stores and digital channels.
Walmart International saw the highest growth, with segment net revenue rising to $35.2 billion, up 12.8% year-on-year.
Sam’s Club U.S. reported segment net revenue of $25.7 billion, an increase of 8.8 percent year-on-year.
Gross profit also improved at Walmart by 96 basis points. That is especially important because Walmart operates on relatively low retail margins, so even modest growth in gross profit can be a significant boost to earnings.
Walmart Raises FY2027 Guidance
Walmart did raise or reaffirm its fiscal 2027 expectations after the excellent quarter results.
The company now expects adjusted EPS to be between $2.80-2.87 for the full year, a bit more than $2.83 in the midpoint of the company’s guidance and well within the $2.80 analyst estimate, according to the company.
Walmart expects constant-currency net sales growth of 4% to 5%, while adjusted operating income is projected to increase 7% to 8.5%.
So we expect capital expenditures to remain approximately 4% of net sales, which is in line with the investment in stores, technology, supply chains, and digital capabilities.
The company also provided guidance for the third quarter. Walmart expects constant-currency net sales growth to be 3% to 3.75% and operating income to climb by 2% to 4%.
Adjusted EPS is expected to be $0.62 -- $0.64 in Q3.
Cash Generation Remains Strong
Walmart’s cash generation numbers were also strong. The company generated $19.7 billion of operating cash flow and free cash flow of about $5.5 billion.
Walmart’s cash generation will enable it to continue investing in its growth programs and also drive shareholder returns.
Walmart’s latest earnings report illustrates how its business model is evolving. While its huge physical store network is still central to the company, eCommerce, advertising, memberships and international operations have become more and more important contributors to growth.
The 23% increase in global eCommerce sales is particularly notable. Walmart is increasingly competing not only with traditional retailers but also with big online platforms and its investments in delivery, fulfillment and digital marketplaces appear to be helping it capture a larger share of online consumer spending.
Walmart’s Q2 FY2027 report is impressive overall: revenue beat expectations, adjusted EPS blew past expectations, net income came in better than expectations and digital sales were growing at a rapid pace.
But more than now, investors will focus on if Walmart will be able to maintain this momentum as we enter the second half of fiscal 2027.
For WMT shareholders and market observers, the results confirm Walmart’s position as one of the world’s largest retailers while also illustrating just how aggressively the company is expanding its digital and higher-margin businesses.
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