◆ Inside the Latest Quarter (Q2 FY2027)

Walmart (WMT) — the variant view

Operating income up 28.8%, net income down 9.4%, and a single non-operating line explains the whole gap.

📈 WMT valuation, revenue & earnings — P/E, P/S, revenue, EPS →

Walmart reported the quarter ended 31 July 2026 on 20 August, and the headline and the bottom line point in opposite directions.

June 2026 quarter: the gap between the lines ($bn)$9.4bn +28.8%Operating income-$1.2bnOther losses this year+$2.7bnOther gains last year$6.4bn -9.4%Net income attributableA $3.9bn swing in non-operating marks, none of it trading.
Operating income rose 28.8% and net income fell 9.4% in the same quarter. One non-operating line explains the whole gap, and $2.9bn of tariff refunds explains most of the rest.

Revenue was $187,937 million, up 5.9% and 5.1% in constant currency. Operating income was $9,383 million, up 28.8%. And consolidated net income attributable to Walmart was $6,366 million against $7,026 million a year earlier — down 9.4%, with diluted earnings per share of $0.80 against $0.881.

Both are correct and the reconciliation is one line. "Other (gains) and losses" was a charge of $1,200 million this year against a gain of $2,708 million last year — a swing of $3,908 million, none of it operating, all of it marks on equity and other investments2. Adjusted earnings per share was $0.81, excluding a net loss of $0.12 on those investments and a net benefit of $0.11 from a tax matter3.

The operating line has its own adjustment. Roughly $2.9 billion of tariff refunds arrived in the quarter, recorded as a reduction of cost of sales4; the gross profit rate rose 96 basis points, 158 at Walmart U.S., and adjusted constant-currency operating income growth was 17.4% rather than 28.8%5.

Underneath, the business did well. Global eCommerce grew 23%, led by store-fulfilled pickup and delivery and by marketplace; global advertising grew 38%, with Walmart Connect excluding VIZIO up 43%; membership fee revenue grew 17%; marketplace sales grew 52%67. Walmart U.S. comparable sales rose 2.6% — transactions up 1.5% excluding fuel, ticket up 1.1% — held back by about 125 basis points of pharmacy deflation from the maximum fair price regulation that took effect in January8. Sam's Club operating income rose 44.3%, International 16.6%.

The blemishes are consistent with the file. Walmart U.S. operating expenses deleveraged 72 basis points on claims, depreciation and healthcare costs9. Free cash flow for the half was $5.5 billion, $1.4 billion lower than a year earlier, on operating cash flow that was $1.4 billion higher10 — capital expenditure is taking the difference. Return on investment was 15.4%11.

Guidance went up: full-year net sales growth of 4.0% to 5.0% and adjusted operating income growth of 7.0% to 8.5% in constant currency, with adjusted earnings per share of $2.80 to $2.8712. The company repurchased 42.3 million shares for $5.1 billion in the first half13.

Read it as a good operating quarter inside an unreadable GAAP one, with the real news being that Walmart is choosing to spend a court's money on prices rather than report it as profit.

References
  1. Moat Explorer calcAnd consolidated net income attributable to Walmart was $6,366 million against $7,026 million a year earlier — down 9.4%, with diluted earnings per share of $0.80 against $0.88.
    Moat Explorer calculation from figures in Walmart's own filings: global eCommerce of about $150.4 billion (Walmart U.S. $99.6B + International $35.8B + Sam's Club $15.0B) against $120.9 billion, a $29.5 billion increase against a $31,875M rise in net sales ($706,413M against $674,538M), about 92%; Walmart U.S. selling floor of 698.7 million square feet (633,724 + 36,609 + 28,375 thousand) and net sales per store of $104.7 million ($482,975M over 4,611 stores); operating margin 4.18% ($29,825M/$713,163M) against 4.31% ($27,012M/$648,125M); net margin 3.07%; gross profit rate 24.2% ($171,018M/$706,413M); grocery 59.1% of Walmart U.S. net sales ($285,482M/$482,975M) against 59.8% ($264,210M/$441,817M) and grocery growth of 3.4%; general merchandise to grocery ratio 0.40 against 0.43; health and wellness +26.7% ($54,898M to $69,547M); payables less inventories $4,210M ($63,061M less $58,851M); rent 0.34% of revenue ($2,434M/$713,163M); capital expenditure 64% of operating cash flow ($26,642M/$41,565M); a 1% overrun on $147,943M of expense is $1,479M; eCommerce penetration 27.5% international ($35.8B/$130,423M) and 20.6% at Walmart U.S. ($99.6B/$482,975M); shareholder returns $15,587M ($7,507M dividends plus $8,080M repurchases) against $14,923M of free cash flow; Q2 FY2027 net income attributable down 9.4% ($6,366M against $7,026M); Walmart U.S. comparable sales of about 3.9% excluding the 125 basis point pharmacy headwind — FY2024-Q2 FY2027 · publ. September 2026 · source ↗
  2. Reported"Other (gains) and losses" was a charge of $1,200 million this year against a gain of $2,708 million last year — a swing of $3,908 million, none of it operating, all of it marks on equity and other investments.
    Walmart Form 10-Q, quarterly period ended July 31, 2026 - condensed consolidated financial statements and notes (total revenues $187,937M, operating income $9,383M, other losses of $1,200M against gains of $2,708M, net income attributable to Walmart $6,366M and diluted EPS $0.80; segment note; the gain-contingency note recording approximately $2.9 billion of IEEPA tariff refunds received from U.S. Customs and Border Protection as a reduction of cost of sales; the statement that less than one third of what Walmart sells in the U.S. is imported) — Q2 FY2027 (quarter ended July 31, 2026) · publ. August 28, 2026 · source ↗
  3. ReportedAdjusted earnings per share was $0.81, excluding a net loss of $0.12 on those investments and a net benefit of $0.11 from a tax matter.
    Walmart second-quarter fiscal 2027 earnings release (Form 8-K exhibit 99.1) - revenue $187.9 billion +5.9% and +5.1% in constant currency; operating income +28.8% and +17.4% adjusted in constant currency; global eCommerce +23%; global advertising +38% with Walmart Connect excluding VIZIO +43%; membership fee revenue +17%; gross profit rate +96 basis points and Walmart U.S. +158; Walmart U.S. comp sales +2.6% and operating income +20.6% with operating expenses deleveraged 72 basis points; Sam's Club operating income +44.3% and International +16.6%; ROA 8.0% and ROI 15.4%; free cash flow $5.5 billion; 42.3 million shares repurchased for $5.1 billion year to date; FY27 guidance of 4.0-5.0% net sales growth, 7.0-8.5% adjusted operating income growth and $2.80-$2.87 adjusted EPS — Q2 FY2027 · publ. August 20, 2026 · source ↗
  4. ReportedRoughly $2.9 billion of tariff refunds arrived in the quarter, recorded as a reduction of cost of sales; the gross profit rate rose 96 basis points, 158 at Walmart U.S., and adjusted constant-currency operating income growth was 17.4% rather than 28.8%.
    Walmart Form 10-Q, quarterly period ended July 31, 2026 - condensed consolidated financial statements and notes (total revenues $187,937M, operating income $9,383M, other losses of $1,200M against gains of $2,708M, net income attributable to Walmart $6,366M and diluted EPS $0.80; segment note; the gain-contingency note recording approximately $2.9 billion of IEEPA tariff refunds received from U.S. Customs and Border Protection as a reduction of cost of sales; the statement that less than one third of what Walmart sells in the U.S. is imported) — Q2 FY2027 (quarter ended July 31, 2026) · publ. August 28, 2026 · source ↗
  5. ReportedRoughly $2.9 billion of tariff refunds arrived in the quarter, recorded as a reduction of cost of sales; the gross profit rate rose 96 basis points, 158 at Walmart U.S., and adjusted constant-currency operating income growth was 17.4% rather than 28.8%.
    Walmart second-quarter fiscal 2027 earnings release (Form 8-K exhibit 99.1) - revenue $187.9 billion +5.9% and +5.1% in constant currency; operating income +28.8% and +17.4% adjusted in constant currency; global eCommerce +23%; global advertising +38% with Walmart Connect excluding VIZIO +43%; membership fee revenue +17%; gross profit rate +96 basis points and Walmart U.S. +158; Walmart U.S. comp sales +2.6% and operating income +20.6% with operating expenses deleveraged 72 basis points; Sam's Club operating income +44.3% and International +16.6%; ROA 8.0% and ROI 15.4%; free cash flow $5.5 billion; 42.3 million shares repurchased for $5.1 billion year to date; FY27 guidance of 4.0-5.0% net sales growth, 7.0-8.5% adjusted operating income growth and $2.80-$2.87 adjusted EPS — Q2 FY2027 · publ. August 20, 2026 · source ↗
  6. ReportedGlobal eCommerce grew 23%, led by store-fulfilled pickup and delivery and by marketplace; global advertising grew 38%, with Walmart Connect excluding VIZIO up 43%; membership fee revenue grew 17%; marketplace sales grew 52%.
    Walmart second-quarter fiscal 2027 earnings release (Form 8-K exhibit 99.1) - revenue $187.9 billion +5.9% and +5.1% in constant currency; operating income +28.8% and +17.4% adjusted in constant currency; global eCommerce +23%; global advertising +38% with Walmart Connect excluding VIZIO +43%; membership fee revenue +17%; gross profit rate +96 basis points and Walmart U.S. +158; Walmart U.S. comp sales +2.6% and operating income +20.6% with operating expenses deleveraged 72 basis points; Sam's Club operating income +44.3% and International +16.6%; ROA 8.0% and ROI 15.4%; free cash flow $5.5 billion; 42.3 million shares repurchased for $5.1 billion year to date; FY27 guidance of 4.0-5.0% net sales growth, 7.0-8.5% adjusted operating income growth and $2.80-$2.87 adjusted EPS — Q2 FY2027 · publ. August 20, 2026 · source ↗
  7. ReportedGlobal eCommerce grew 23%, led by store-fulfilled pickup and delivery and by marketplace; global advertising grew 38%, with Walmart Connect excluding VIZIO up 43%; membership fee revenue grew 17%; marketplace sales grew 52%.
    Walmart second-quarter fiscal 2027 earnings release (Form 8-K exhibit 99.1) - revenue $187.9 billion +5.9% and +5.1% in constant currency; operating income +28.8% and +17.4% adjusted in constant currency; global eCommerce +23%; global advertising +38% with Walmart Connect excluding VIZIO +43%; membership fee revenue +17%; gross profit rate +96 basis points and Walmart U.S. +158; Walmart U.S. comp sales +2.6% and operating income +20.6% with operating expenses deleveraged 72 basis points; Sam's Club operating income +44.3% and International +16.6%; ROA 8.0% and ROI 15.4%; free cash flow $5.5 billion; 42.3 million shares repurchased for $5.1 billion year to date; FY27 guidance of 4.0-5.0% net sales growth, 7.0-8.5% adjusted operating income growth and $2.80-$2.87 adjusted EPS — Q2 FY2027 · publ. August 20, 2026 · source ↗
  8. ReportedWalmart U.S. comparable sales rose 2.6% — transactions up 1.5% excluding fuel, ticket up 1.1% — held back by about 125 basis points of pharmacy deflation from the maximum fair price regulation that took effect in January.
    Walmart second-quarter fiscal 2027 earnings presentation (Form 8-K exhibit 99.2) - Walmart U.S. comp sales +2.6% with transactions excluding fuel +1.5% and average ticket excluding fuel +1.1% against total like-for-like inflation of 1.4%, and an approximately 125 basis point pharmacy headwind from maximum fair price regulation; eCommerce +24% including approximately 43% growth in store-fulfilled delivery, total advertising +38% including Walmart Connect +43%, and Marketplace sales +52%; expedited deliveries under three hours approximately 37% of store-fulfilled orders; share gains across categories and income tiers led by upper-income households — Q2 FY2027 · publ. August 20, 2026 · source ↗
  9. ReportedWalmart U.S. operating expenses deleveraged 72 basis points on claims, depreciation and healthcare costs.
    Walmart second-quarter fiscal 2027 earnings release (Form 8-K exhibit 99.1) - revenue $187.9 billion +5.9% and +5.1% in constant currency; operating income +28.8% and +17.4% adjusted in constant currency; global eCommerce +23%; global advertising +38% with Walmart Connect excluding VIZIO +43%; membership fee revenue +17%; gross profit rate +96 basis points and Walmart U.S. +158; Walmart U.S. comp sales +2.6% and operating income +20.6% with operating expenses deleveraged 72 basis points; Sam's Club operating income +44.3% and International +16.6%; ROA 8.0% and ROI 15.4%; free cash flow $5.5 billion; 42.3 million shares repurchased for $5.1 billion year to date; FY27 guidance of 4.0-5.0% net sales growth, 7.0-8.5% adjusted operating income growth and $2.80-$2.87 adjusted EPS — Q2 FY2027 · publ. August 20, 2026 · source ↗
  10. ReportedFree cash flow for the half was $5.5 billion, $1.4 billion lower than a year earlier, on operating cash flow that was $1.4 billion higher — capital expenditure is taking the difference.
    Walmart second-quarter fiscal 2027 earnings release (Form 8-K exhibit 99.1) - revenue $187.9 billion +5.9% and +5.1% in constant currency; operating income +28.8% and +17.4% adjusted in constant currency; global eCommerce +23%; global advertising +38% with Walmart Connect excluding VIZIO +43%; membership fee revenue +17%; gross profit rate +96 basis points and Walmart U.S. +158; Walmart U.S. comp sales +2.6% and operating income +20.6% with operating expenses deleveraged 72 basis points; Sam's Club operating income +44.3% and International +16.6%; ROA 8.0% and ROI 15.4%; free cash flow $5.5 billion; 42.3 million shares repurchased for $5.1 billion year to date; FY27 guidance of 4.0-5.0% net sales growth, 7.0-8.5% adjusted operating income growth and $2.80-$2.87 adjusted EPS — Q2 FY2027 · publ. August 20, 2026 · source ↗
  11. ReportedReturn on investment was 15.4%.
    Walmart second-quarter fiscal 2027 earnings release (Form 8-K exhibit 99.1) - revenue $187.9 billion +5.9% and +5.1% in constant currency; operating income +28.8% and +17.4% adjusted in constant currency; global eCommerce +23%; global advertising +38% with Walmart Connect excluding VIZIO +43%; membership fee revenue +17%; gross profit rate +96 basis points and Walmart U.S. +158; Walmart U.S. comp sales +2.6% and operating income +20.6% with operating expenses deleveraged 72 basis points; Sam's Club operating income +44.3% and International +16.6%; ROA 8.0% and ROI 15.4%; free cash flow $5.5 billion; 42.3 million shares repurchased for $5.1 billion year to date; FY27 guidance of 4.0-5.0% net sales growth, 7.0-8.5% adjusted operating income growth and $2.80-$2.87 adjusted EPS — Q2 FY2027 · publ. August 20, 2026 · source ↗
  12. ReportedGuidance went up: full-year net sales growth of 4.0% to 5.0% and adjusted operating income growth of 7.0% to 8.5% in constant currency, with adjusted earnings per share of $2.80 to $2.87.
    Walmart second-quarter fiscal 2027 earnings release (Form 8-K exhibit 99.1) - revenue $187.9 billion +5.9% and +5.1% in constant currency; operating income +28.8% and +17.4% adjusted in constant currency; global eCommerce +23%; global advertising +38% with Walmart Connect excluding VIZIO +43%; membership fee revenue +17%; gross profit rate +96 basis points and Walmart U.S. +158; Walmart U.S. comp sales +2.6% and operating income +20.6% with operating expenses deleveraged 72 basis points; Sam's Club operating income +44.3% and International +16.6%; ROA 8.0% and ROI 15.4%; free cash flow $5.5 billion; 42.3 million shares repurchased for $5.1 billion year to date; FY27 guidance of 4.0-5.0% net sales growth, 7.0-8.5% adjusted operating income growth and $2.80-$2.87 adjusted EPS — Q2 FY2027 · publ. August 20, 2026 · source ↗
  13. ReportedThe company repurchased 42.3 million shares for $5.1 billion in the first half.
    Walmart second-quarter fiscal 2027 earnings release (Form 8-K exhibit 99.1) - revenue $187.9 billion +5.9% and +5.1% in constant currency; operating income +28.8% and +17.4% adjusted in constant currency; global eCommerce +23%; global advertising +38% with Walmart Connect excluding VIZIO +43%; membership fee revenue +17%; gross profit rate +96 basis points and Walmart U.S. +158; Walmart U.S. comp sales +2.6% and operating income +20.6% with operating expenses deleveraged 72 basis points; Sam's Club operating income +44.3% and International +16.6%; ROA 8.0% and ROI 15.4%; free cash flow $5.5 billion; 42.3 million shares repurchased for $5.1 billion year to date; FY27 guidance of 4.0-5.0% net sales growth, 7.0-8.5% adjusted operating income growth and $2.80-$2.87 adjusted EPS — Q2 FY2027 · publ. August 20, 2026 · source ↗
Sources
Generated September 22, 2026