Walmart (WMT) Stock Drops 7% Despite Earnings Beat: Here’s What Wall Street Thinks

Key Takeaways

• Walmart delivered Q2 adjusted earnings of $0.81 per share, surpassing the $0.74 Wall Street estimate, while revenue reached $187.9 billion, marking a 5.9% annual increase.
• U.S. comparable sales for Walmart-only locations increased just 2.6%, falling short of the 3.67% analyst forecast—representing the weakest U.S. sales performance in six years.
• Shares of WMT plummeted approximately 7% during premarket hours, pushing the stock below its year-opening level.
• Third-quarter adjusted EPS outlook was set at $0.62 to $0.64, while full-year EPS projections were elevated to $2.80 to $2.87.
• Wall Street firms including Jefferies, RBC, UBS, and Evercore ISI retained positive ratings, attributing the shortfall to broader economic factors rather than company-specific weaknesses.

Shares of Walmart (WMT) tumbled approximately 7% during Thursday’s premarket session following the retailer’s announcement of 2.6% U.S. comparable sales growth, significantly trailing the 3.67% consensus projection. The disappointing figure pushed shares beneath their year-to-date starting point.

Walmart Inc., WMT

The retail giant disclosed second-quarter adjusted earnings of $0.81 per share, exceeding the $0.74 analyst consensus. Total revenue registered at $187.9 billion, reflecting a 5.9% year-over-year climb and surpassing the $186.75 billion expectation.

While earnings topped forecasts, the U.S. comparable sales figure proved most damaging to investor sentiment. Mizuho’s David Bellinger characterized the results as a “worst-case scenario” and labeled it “one of the biggest misses in years from WMT.”

Company leadership clarified that comparable sales would have reached 3.4% when health and wellness categories are excluded—segments that faced pharmacy-related price deflation stemming from maximum fair price regulations.

The retailer emphasized its strategic price reductions aimed at capturing additional market share, positioning the sales slowdown as a deliberate reinvestment strategy rather than an indicator of weakening consumer demand.

Wall Street Maintains Optimistic Stance

Jefferies’ Corey Tarlowe reaffirmed his Buy recommendation, highlighting sustained transaction volume expansion, widespread market share capture, and robust performance across e-commerce, advertising, marketplace operations, and membership programs.

Steven Shemesh from RBC Capital observed that Walmart achieved nearly 10% operating profit expansion when tariff refunds are excluded from calculations. He characterized the deceleration as reflecting “broader macro dynamics” rather than evidence that Walmart’s competitive gains are diminishing.

UBS’s Michael Lasser acknowledged the results will likely spark debate among investors but maintained his firm’s optimistic outlook. Evercore ISI’s Greg Melich preserved his Outperform designation, emphasizing that full-year sales guidance was upgraded to a 4.0% to 5.0% range from the previous 3.5% to 4.5% projection.

Strategic Initiatives Continue Delivering Results

Worldwide eCommerce revenue expanded 23%, propelled by store-fulfilled pickup services, delivery operations, and marketplace platform growth. The company’s global advertising division soared 38%, with U.S. advertising revenues matching that impressive 38% growth rate.

Operating income advanced 28.8%, or 17.4% on an adjusted constant currency foundation. Gross profit margin improved by 96 basis points, partially attributed to tariff refunds collected during the quarter.

CFO John David Rainey indicated the organization intends to reinvest those tariff refunds into enhancing customer experience and competitive pricing initiatives throughout the latter half of the fiscal year.

Looking ahead to Q3, Walmart projects net sales growth between 3.0% and 3.75% in constant currency terms. Management noted a headwind exceeding 100 basis points resulting from a calendar shift of Flipkart’s Big Billion Days promotional event between the third and fourth quarters.

Full-year fiscal 2027 adjusted earnings per share guidance received an upward revision to $2.80 to $2.87, compared with the prior $2.75 to $2.85 range.

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