Walmart Beats on Q2 Revenue and EPS but Posts Slowest U.S. Comps in Six Years

WMT delivered a headline beat and a soft underlying quarter at the same time. Fiscal second-quarter revenue came in at $187.9 billion, up 5.9% and ahead of the roughly $186.8 billion consensus, with operating income of $9.38 billion and adjusted earnings per share of $0.81 against a $0.74 estimate. Shares still fell about 6% ahead of the open.

The reason sits one line down. U.S. comparable sales rose 2.6%, the slowest pace in more than six years and a sharp deceleration from 4.1% in the prior quarter. Part of that is regulatory rather than consumer: federal rules requiring pharmacies to dispense certain high-cost Medicare drugs at capped prices pulled down the wellness category. Excluding wellness, comps rose 3.4%, which was still short of the roughly 3.8% analysts expected. The growth engines that have carried Walmart held up, with global e-commerce up 23% and U.S. advertising through Walmart Connect up 43% excluding VIZIO.

The earnings beat is also less clean than it looks. A meaningful share of the margin expansion came from tariff refunds: CFO John David Rainey said the retailer was eligible for about $2.9 billion, with just under $100 million still outstanding, and that Walmart intends to push those dollars back into shelf prices rather than let them sit in margin. That is a durable share-of-wallet play, but it is not recurring earnings power, which is a large part of why the market discounted the print.

Management raised full-year adjusted EPS guidance to $2.80-$2.87 while describing the outlook as reserved. With the stock carrying a premium multiple relative to retail peers, a quarter that beats on a one-time refund and misses on core traffic-driven comps leaves little room for the valuation to absorb bad news.

What to watch from here: whether ex-wellness comps reaccelerate once the pharmacy pricing headwind laps, how much of the tariff refund actually shows up as price investment versus margin, and whether e-commerce and advertising growth can keep offsetting a visibly more cautious U.S. consumer.

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