Walmart will announce its Q2 FY2026 results on August 21, 2025. Sam's Club and U.S. e-commerce are expected to remain key growth drivers, though Flipkart's expansion in India may face near-term headwinds.
Market Expectations
Consensus forecasts project Walmart's Q2 FY2026 sales at $176 billion (+4% YoY), adjusted EPS at $0.73 (+8.91% YoY), and adjusted net profit at $5.85 billion. Analysts warn that tariff hikes may negatively impact Q2 performance but note Walmart could partially offset cost pressures through diversified revenue streams (e.g., advertising, membership services) and supply chain optimization to sustain profit growth.
Previous Quarter Review
Q1 FY2026 Highlights:
Net sales: $165.609 billion (+2.54% YoY)
Net profit attributable to shareholders: $4.487 billion (-12.09% YoY)
Adjusted EPS: $0.61 (+1.7% YoY)
U.S. Walmart segment: Sales reached $112.16 billion (+3.2% YoY), with comparable sales up 4.5% (above consensus of 3.9%). Gross margin edged up to 24.2% from 24.1% a year earlier; operating margin rose to 4.3% from 4.2%.
International segment: Revenue rose 7.8% to $29.8 billion (at constant currency), but operating profit fell 17.5% to $1.26 billion due to strategic investments in Flipkart.
Sam's Club standout: Comparable sales grew 6.7%, transactions rose 4.8%, and membership revenue jumped 9.6%. Notably, Sam's Club China membership revenue surged over 40%.
Current Quarter Outlook
International Growth Slows but Strategic Value Intact
Flipkart’s India expansion continues, though high tariffs may pressure margins. In China, Walmart’s traditional hypermarkets continue to close, but Sam's Club maintains expansion (one new store in Q1), with membership numbers and penetration rates hitting record highs. Sam's Club China membership revenue growth (+40%+) far exceeds the corporate average (+15%). Q2 international revenue growth is expected at 7%-8%, but operating margins may remain pressured by Flipkart investments.
E-commerce and Delivery Services to Drive Sales
Walmart’s global e-commerce sales grew 22% YoY, with U.S. online operations contributing ~350 bps to comparable sales. Delivery services primarily target high-income households prioritizing speed over price: 20% of 4.4 billion U.S. same-day/next-day deliveries in the past 12 months arrived within three hours. Management emphasized faster delivery times and lower costs enhancing shopper convenience. In China, Sam's Club online sales penetration reached 55%, with omnichannel sales exceeding RMB100 billion, solidifying its role as a key global growth engine. E-commerce and delivery are projected to further boost Q2 sales, especially in essentials.
Analyst Views
Soochow Securities cautions that tariff impacts may exceed guidance: Persistent tariffs could drive significant price hikes in discretionary goods. Stress tests show Chinese suppliers’ reluctance to absorb 145% tariffs, while demand elasticity for discretionary items is much higher than for groceries. Tariff headwinds may surpass company projections.
Tigress Financial (Buy, PT ↑$120): Advertising and online fulfillment services expansion could boost cash flow and margins.
Morgan Stanley (Overweight, PT $115): Walmart+ membership growth remains robust per weekly survey data.
UBS (Buy, PT $110): Deep integration of logistics and store networks presents a new growth pillar; automation and expedited delivery may further lift market share.
Mizuho (Outperform, PT ~$105): Positive outlook based on operational efficiency.