Walmart Lifts FY2026 Outlook After Q2 Revenue Beat, Even As Tariff Costs Rise
A Quarter of Mixed Results
Walmart reported revenue of $177.4 billion for the second quarter of fiscal 2026, above analyst forecasts of $176.16 billion. Adjusted earnings per share were $0.68, short of the $0.74 expected. It marked the first time since 2022 that the company missed on quarterly earnings. Profit was pressured by restructuring costs, higher insurance claims, and legal settlements.
Comparable sales in the U.S. rose 4.6 percent excluding fuel, supported by grocery and health and wellness categories. At Sam’s Club, comparable sales increased 5.9 percent excluding fuel, better than the 5.2 percent analysts anticipated.
Strong Digital Growth
Global e-commerce sales grew 25 percent, with U.S. online sales rising 26 percent. Walmart highlighted the growing role of store-fulfilled delivery, which increased nearly 50 percent year over year. About one-third of those deliveries were completed within three hours.
The company’s advertising business also expanded. Global advertising sales increased 46 percent year over year, while Walmart Connect grew 31 percent in the U.S. Management said the advertising and marketplace businesses continue to contribute to e-commerce profitability.
Updated Guidance
Walmart lifted its full-year net sales outlook to 3.75 to 4.75 percent growth, up from its prior range of 3 to 4 percent. The adjusted earnings per share forecast also ticked up slightly, to $2.52 to $2.62 from the previous $2.50 to $2.60. For the third quarter, the company expects similar sales growth.
Tariff Pressures
Chief Financial Officer John David Rainey told CNBC that Walmart is managing tariffs on a category-by-category basis. Some costs are being absorbed while others are being passed along to shoppers. He noted that tariff-impacted costs are “drifting upwards” and will likely continue to do so in the coming quarters.
Chief Executive Doug McMillon added that the gradual pace of tariff implementation has muted the impact on customer behavior. However, he acknowledged that lower and middle-income households have shown more sensitivity to price increases in discretionary categories.
Customer Behavior Remains Steady
Despite the higher costs, Walmart said it has not seen a meaningful change in overall spending patterns. Private label sales were roughly flat year over year, which the company cited as evidence of consistent consumer behavior. Transactions in the U.S. rose 1.5 percent and average ticket increased 3.1 percent.
Market Reaction
Shares of Walmart fell about 4 percent in morning trading following the results. Investors weighed the stronger sales outlook against the profit miss and rising costs from tariffs.
Final Thoughts
The quarter underscored both sides of Walmart’s scale. Costs are climbing as tariffed goods flow into inventory, but the retailer is continuing to draw shoppers with value, a growing online offer, and faster fulfillment. With its full-year outlook raised, Walmart signaled confidence that the strengths outweigh the headwinds as it heads into the second half of fiscal 2026.
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