Filing update · Walmart (WMT)

Walmart's quarter got a $2.9 billion tariff refund, and the guide is slowing

Walmart grew second-quarter fiscal 2027 net sales 5.9% to $186.1 billion, with U.S. eCommerce up to $29.4 billion and operating income up to $9.4 billion. About $2.9 billion of tariff refunds lowered cost of sales in the quarter, much of it reinvested in prices; net income fell, the third-quarter guide is 3.0% to 3.75%, and Walmart has since sold about $3 billion of U.S. and C$5 billion of Canadian notes.

Published
October 24, 2026
Data through
July 31, 2026
Latest filing used
October 23, 2026
Key numbers
Net sales, Q2 FY27
$186.1B
From $175.75 billion a year earlier [2]
Tariff refunds in Q2
~$2.9B
Recorded as lower cost of sales [2]
Walmart U.S. comps
+3.3%
Sam's Club U.S. +8.6% [2]
Q3 FY27 sales guide
+3.0–3.75%
In constant currency [3]
What changed

Walmart's second quarter of fiscal 2027, to July 31, 2026, looked like another strong one: sales, eCommerce and operating income all grew, and margins widened. Much of the margin gain, though, traces to a one-time refund of tariffs.

  • Net sales were $186.1 billion against $175.75 billion [2].
  • Comparable sales rose 3.3% at Walmart U.S. and 8.6% at Sam's Club U.S. [2].
  • Operating income rose to $9.4 billion from $7.3 billion [3].
  • Tariff refunds of about $2.9 billion lowered cost of sales [2].
  • EPS was $0.80 reported and $0.81 adjusted [3].
  • Since then: Walmart agreed on October 19 to sell U.S. and Canadian notes, closing October 23 [1].
Where the sales came from

All three lines grew; eCommerce grew fastest.

Chart: Second-quarter net sales, $ billions
Second-quarter net sales, $ billions
0B50B100B150BWalmart U.S.: Q2 FY26 120.91B, Q2 FY27 125.19B125.19BWalmart U.S.International: Q2 FY26 31.20B, Q2 FY27 35.20B35.20BInternationalU.S. eCommerce: Q2 FY26 23.70B, Q2 FY27 29.40B29.40BU.S. eCommerce
As Walmart reported them [2]. U.S. eCommerce is part of Walmart U.S. net sales.
Show the numbers
ItemQ2 FY26Q2 FY27
Walmart U.S.120.91B125.19B
International31.20B35.20B
U.S. eCommerce23.70B29.40B
Operating income up, net income down

The retail business earned more; gains and losses on investments moved net income the other way.

Chart: Second quarter: operating income against net income, $ billions
Second quarter: operating income against net income, $ billions
0B2.5B5B7.5B10BOperating income: Q2 FY26 7.29B, Q2 FY27 9.38B9.38BOperating incomeNet income: Q2 FY26 7.03B, Q2 FY27 6.37B6.37BNet income
Operating income [3] and consolidated net income attributable to Walmart [2], as reported.
Show the numbers
ItemQ2 FY26Q2 FY27
Operating income7.29B9.38B
Net income7.03B6.37B
Anomalies worth a closer look

Five things in the filings that change how the headline numbers should be read.

Anomalies (5)
Two ways to read it

The same filings support two different conclusions. We set out both; this is not a view on whether to buy or sell the stock.

The two readings

The case that Walmart's omnichannel machine is compounding

On this reading Walmart is gaining share across stores, delivery and advertising, with operating leverage showing.

  1. 01
    Broad comparable growth
    Walmart U.S. comparable sales rose 3.3% on transactions and ticket, and Sam's Club U.S. 8.6% [2].
  2. 02
    eCommerce scale
    U.S. eCommerce sales reached about $29.4 billion against $23.7 billion [2], up about 24% (calculated).
  3. 03
    International momentum
    International net sales rose to $35.2 billion from $31.2 billion [2].
  4. 04
    Margin expansion
    Operating income rose 89 basis points as a share of sales [2], and adjusted EBITDA margin reached 7.2% against 6.5% [3].
  5. 05
    Ample liquidity
    Walmart has $15.0 billion of committed, undrawn U.S. credit lines [2].

The case that one-offs flatter the quarter and costs are rising

On this reading the margin story leans on tariff refunds, while capex, debt and regulatory costs climb.

  1. 01
    Refund-boosted margin
    About $2.9 billion of tariff refunds lowered cost of sales in the quarter [2].
  2. 02
    Slower growth ahead
    The third-quarter guide is 3.0% to 3.75% [3].
  3. 03
    Expenses are rising faster
    Operating expenses rose 11 basis points as a share of sales [2].
  4. 04
    More debt
    Long-term debt rose to $39.9 billion [2], with new notes priced at up to 5.550% in the U.S. [1].
  5. 05
    Legal costs
    Walmart agreed to a $100 million judgment and ongoing reporting obligations in a settlement [2].
Hypotheses: short, medium and long term

Testable statements, each with what would support or contradict it and when the next evidence arrives. Thresholds marked "our marker" are ours, not Walmart's.

Hypotheses (3)
  1. Short termH1
    Next quarter: Q3 FY27 results

    Sales land inside the guide without refund help

    The guide is 3.0% to 3.75% constant-currency growth [3], with no refund equivalent to the second quarter's $2.9 billion [2].
    What would support it
    Net sales growth inside the range with operating income still up year on year.
    What would contradict it
    Growth below 3.0% [3], or operating income down year on year once the refund is gone.
    Next check: Q3 FY27 results, likely late November 2026 (last year's came on November 20 [9]).
  2. Medium termH2
    Fiscal 2027 and into 2028

    eCommerce and advertising keep lifting margins

    U.S. eCommerce grew about 24% in the second quarter (calculated from [2]).
    What would support it
    Operating income growing faster than sales for the year, excluding refunds.
    What would contradict it
    Operating margin flat once the refund quarter is excluded.
    Next check: The fiscal 2027 annual report (about March 2027).
  3. Long termH3
    Three years and more

    Heavier capex earns its return

    Capital spending rose $2.8 billion for the omnichannel strategy [3], and return on investment was 15.4% [3].
    What would support it
    ROI holding above 15% (our marker) as capex stays high.
    What would contradict it
    ROI falling as debt and capex rise faster than operating income.
    Next check: Each annual report.
Risks and contrary evidence
  • Tariffs. Refunds were a one-time recovery; ongoing tariff costs remain [2].
  • Investment valuations. Changes in the fair value of equity investments move net income [3].
  • Legal matters. Walmart says it cannot estimate the range of loss for several matters [2].
  • Supplier finance. Obligations under supplier finance programs were $6.4 billion [2].
What would change the view
  • Third-quarter operating income still up year on year without refunds.
  • Sales growth returning above 5% (our marker) once the Flipkart timing shift reverses.
  • Capex easing while eCommerce growth holds.
Next check

Third-quarter fiscal 2027 results. Last year's came on November 20, 2025 [9], so expect the next update in late November 2026.

How this report was made

Every figure comes from Walmart's own SEC filings, listed below; no market prices or third-party data were used. Statements were extracted from the filings with the help of an AI model, each quoted passage was matched against the filing text, and this report was written by Claude (Anthropic) from that evidence. Every figure was checked against the quoted filing text before publication. Figures marked "calculated" are simple arithmetic on reported numbers.

AI-Inflect screen

The deterministic screen's current reading for this company, market data through October 23, 2026. It is separate from the filing analysis above and can change daily; it is not a view on the stock. Open in AI-Inflect

Stage and setup
Stage
Developing Inflection
Fundamentals
Improving
Inflection type
Revenue inflection
Technical setup
Breakout attempt
Sector
Retail consumer
Condition matrix · 3 true, 14 false, 0 unknown
  • Revenue growth positiveTrue
  • Revenue growth improvingTrue
  • Revenue growth acceleratingFalse
  • Revenue zero-crossing (loss→growth)False
  • Revenue improved 2 straight qtrsFalse
  • Revenue improved 3 straight qtrsFalse
  • Revenue improved 4 straight qtrsFalse
  • EPS improvingFalse
  • EPS loss→profit crossingFalse
  • Earnings acceleratingFalse
  • Gross margin expandingFalse
  • Operating margin expandingFalse
  • Operating leverageFalse
  • FCF improvingFalse
  • FCF negative→positive crossingFalse
  • FCF margin expandingFalse
  • Cash conversion improvingTrue
Sources

Company filings with the U.S. Securities and Exchange Commission (SEC).

  1. [1]Current report: U.S. and Canadian notes offerings · Form 8-K, filed October 23, 2026 · accession 0001193125-26-429539
  2. [2]Quarterly report, quarter ended July 31, 2026 (Q2 fiscal 2027) · Form 10-Q, filed August 28, 2026 · accession 0000104169-26-000154
  3. [3]Second-quarter fiscal 2027 earnings release · Form 8-K, filed August 20, 2026 · accession 0000104169-26-000145
  4. [4]Quarterly report, quarter ended April 30, 2026 · Form 10-Q, filed May 29, 2026 · accession 0000104169-26-000102
  5. [5]First-quarter fiscal 2027 earnings release · Form 8-K, filed May 21, 2026 · accession 0000104169-26-000095
  6. [6]Annual report for fiscal 2026 · Form 10-K, filed March 13, 2026 · accession 0000104169-26-000055
  7. [7]Fourth-quarter fiscal 2026 earnings release · Form 8-K, filed February 19, 2026 · accession 0000104169-26-000032
  8. [8]Quarterly report, quarter ended October 31, 2025 · Form 10-Q, filed December 3, 2025 · accession 0000104169-25-000191
  9. [9]Third-quarter fiscal 2026 earnings release · Form 8-K, filed November 20, 2025 · accession 0000104169-25-000177

This report is general information and education, not a recommendation to buy or sell any security and not personalised financial advice. It follows our editorial principles: every figure traces to the sources above, and figures we calculated are marked as such.

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