Walmart Q2 FY2027 Earnings: Operating Income Outpaces Revenue Growth

Walmart (NASDAQ: WMT) reported Q2 FY2027 revenue of $187.9 billion, up 5.9% year over year, with GAAP EPS of $0.80 and adjusted EPS of $0.81. Operating income increased 28.8%, or 17.4% on an adjusted constant-currency basis, as tariff refunds lifted the gross profit rate and were partly offset by price investments. Global eCommerce sales rose 23%, while advertising and membership fee revenue grew 38% and 17%, respectively.

Core Earnings Data

Revenue grew 5.1% in constant currency, compared with the reported increase of 5.9%. Operating income grew faster than revenue, although the reported result included the benefit of tariff refunds.

The difference between GAAP and adjusted EPS was only $0.01 because two adjustments largely offset each other: a net-of-tax loss of $0.12 per share on equity and other investments and a net-of-tax benefit of $0.11 from a tax matter.

Business and Segment Performance

Global eCommerce sales increased 23%, led by store-fulfilled pickup and delivery and the marketplace. This growth rate remained well above Walmart’s overall revenue growth, indicating that digital channels continued to expand their role in the company’s sales mix.

Walmart’s global advertising business grew 38%, with strength across its operating segments. Walmart U.S. advertising also increased 38%. Membership fee revenue rose 17% globally, providing another source of growth beyond merchandise sales.

Tariff Refunds Boosted Profitability but Will Be Reinvested

Walmart’s gross profit rate rose 96 basis points, led by Walmart U.S. and primarily affected by tariff refunds. Those refunds also contributed to the 28.8% increase in operating income, although price investments offset part of the benefit.

Management said underlying operating income growth, excluding the net effect of tariff refunds and related price investments, reached the top end of its guidance. Walmart also plans to prioritize remaining tariff refunds for further price investments, meaning the refund-related profit contribution may not flow through to future results in the same way it did this quarter.

Inventory and Return Metrics

Global inventory increased 6.7%, or 6.0% in constant currency, due to strategic initiatives and inflation. Reported inventory growth was slightly higher than reported revenue growth, making the relationship between inventory levels and future sales an important operating measure to monitor.

Walmart reported return on assets of 8.0% and return on investment of 15.4%.

Recent Insider Transactions

The supplied six-month summary shows insider purchases of 1,311,623 shares across 45 transactions, compared with sales of 19,139,308 shares across 32 transactions. Net shares purchased or sold totaled negative 17,827,685, equal to negative 0.50% of the 3.57 billion insider shares held.

The latest 10 reported entries included three officer sales and seven director stock awards. All were classified as direct transactions.

These transactions should be considered by type: the officer transactions were sales, while the director entries were stock grants rather than open-market purchases.

Risks Investors Need to Watch

• Tariff-related profit contribution: Tariff refunds helped raise the gross profit rate and operating income. Walmart’s plan to direct remaining refunds into price investments may limit how much of this benefit remains in future margins.
• Inventory growth: Global inventory rose 6.7%, slightly faster than reported revenue. The company attributed the increase to strategic initiatives and inflation, but investors should monitor whether inventory remains aligned with sales growth.
• EPS adjustment volatility: The investment loss and tax benefit nearly offset this quarter, leaving only a $0.01 difference between GAAP and adjusted EPS. Future changes in either item could create a wider gap between the two measures.

Summary

Walmart’s Q2 FY2027 results combined mid-single-digit revenue growth with faster operating income expansion and continued growth in eCommerce, advertising, and membership fees. The main qualification is that tariff refunds helped reported profitability and will be reinvested in prices, making underlying margin performance and inventory conversion important areas to follow in subsequent quarters.