BENTONVILLE, ARK. — As consumers continue to grapple with financial pressures, Walmart must keep delivering value and leading on price to fuel growth, president and chief executive officer John Furner said in reporting fiscal 2027 second-quarter results.
“Everything we do starts with serving customers and members as an omnichannel retailer. Core to that is delivering value and maintaining price leadership,” Furner said in an Aug. 20 conference call with analysts. “As we said coming out of Q1, customers tell us they’re still feeling some pressure. But it’s clear: Customers are looking for value and convenience, and they want things fast. And that’s where Walmart shines.”
Bentonville-based Walmart sweetened its price appeal in the second quarter by boosting its price rollback count by more than 50%.
“Having the best prices across a basket of goods helps us continue to build trust with our customers and members by helping them save money at a time when many households are carefully managing their budgets,” Furner said. “The Walmart US team delivered more than 11,000 rollbacks during the quarter, up from 7,200 rollbacks at the end of the first quarter, demonstrating our commitment to price investment.”
That investment has enabled Walmart to snare market share from competitors in the food, drug and mass retail channel, Furner noted.
“We’re investing heavily in price because customers need us to, and because we believe it drives market share gains over time,” he said. “Our price gaps to conventional grocers here in the US are strong, and they continue to widen. The share gains we see from this channel have persisted alongside the drug and dollar formats.”
Tariff refunds lift profit
For the second quarter ended July 31, Walmart posted net income of $6.37 billion, equal to 80¢ per share on the common stock, down from $7.03 billion, or 88¢ per share, a year earlier. Excluding a 12¢-per-share net loss on investments and other items, adjusted earnings per share was 81¢, up from 68¢ a year ago. That topped Wall Street’s high-end forecast for adjusted EPS of 79¢.
Consolidated revenue climbed 7% year over year to $187.94 billion from $177.4 billion and was up 5% in constant currency. The retailer cited net sales growth of 6.5% (to $186.1 billion), a 23% jump in global e-commerce sales, a 17% increase in membership fee revenue and a 38% surge in global advertising sales (including a 43% gain for Walmart Connect US retail media) as top-line catalysts.
“The underlying business continued to perform well in the quarter and was largely in line with our expectations, which assumed a slight moderation in sales growth from the first quarter,” Furner said. “Overall, we continued to gain market share. We grew units and transactions, and membership fee revenue was at an all-time high on growth of 17%. We delivered another quarter of strong e-commerce growth, up 23% globally, including the 10th consecutive quarter of growth over 20% for Walmart US.”
Operating income swelled 29% to $9.38 billion (up 27% in constant currency) and advanced 17% on an adjusted basis.
Walmart CEO John Furner said fast delivery is fueling customer acquisition, and the retailer’s Sparky AI assistant is helping grocery sales.
| Photo: ©JESS RODRIGUEZ – STOCK.ADOBE.COM“This includes the benefit from the receipt of tariff refunds in the quarter,” Furner said. “As we suggested on the last call, our intent was to deploy much of that back into price, and that’s what we’re doing. Importantly, our underlying profit growth was where we thought it would be excluding this benefit. Because of our strong top- and bottom-line growth, we’re raising our guidance for the year.”
In the second-quarter call, chief financial officer John Rainey shed more light on Walmart’s tariff refunds.
“As we shared with you in May, we were eligible for approximately $2.9 billion of tariff-free funds, amounting to about 0.5% of annual US net sales. To date, we’ve received substantially all of these tariff refunds,” he said. “As John mentioned, we’ve taken a disciplined approach to investing these funds back into customer experience and price leadership, prioritizing investment in grocery and general merchandise categories.”
For fiscal 2027, Walmart now projects adjusted EPS at $2.80 to $2.87, up from $2.75 to $2.85 previously, and net sales growth of 4% to 5% (constant currency), versus the prior forecast of 3.5% to 4.5%. Adjusted operating income growth is expected to rise 7% to 8.5% (constant currency), up from 6% to 8% previously.
“This upward revision reflects the pass-through of first-half performance but also assumes slightly better second-half sales versus our prior guide, as price investments drive accelerated and sustained share gains,” Rainey said. “Price investments are an immediate benefit to customers but build value over time for the business.”
CEO spotlights fast delivery, AI
At Walmart US, second-quarter net sales rose 3.5% year over year to $125.19 billion. The company attributed the uptick to broad-based market share gains plus a 24% jump in e-commerce sales and 38% growth in advertising sales. Comparable sales excluding fuel increased 2.6%, as the average ticket size edged up 1.1% and customer transactions rose 1.5%.
“For Walmart US, I feel good about how the underlying business is performing,” Furner said. “The team delivered strong sales growth in categories like toys, pantry and fresh, and we continue to see growth from higher-income households.”
Operating income at Walmart US surged almost 21% to $8.21 billion, as gross profit was lifted by tariff refunds and improvements in business mix and e-commerce economics, the company said.
Furner noted that fast delivery in the United States grew 48% in the quarter, fueling share gains.
“Speed isn’t simply a fulfillment metric; it’s an acquisition strategy,” he told analysts. “Customers who use fast delivery shop with us more frequently. They deepen engagement with us, and they’re more likely to become Walmart+ members. The advances we’re making in speed of delivery create another reason for customers that choose Walmart for more shopping occasions. That’s an important shift in how we think about growth.
“And as we become faster, we’re not simply taking share within traditional retail categories. We’re expanding the number of occasions where Walmart can serve customers, like food delivery. In the past, customers may have thought about Walmart primarily for groceries and general merchandise. Today, we’re expanding beyond that. Meal solutions, prepared food partnerships – like the one we announced with Subway – and faster fulfillment allow us to participate in a much broader share of everyday food spending. This is an exciting opportunity, and we’re just getting started.”
Walmart’s AI-powered shopping assistant, Sparky, also is pitching in on the food business, according to Furner.
“We believe AI will improve nearly every part of our business by making shopping better and our associates work easier,” he said. “Sparky is a great example. The number of customers using Sparky is up 70% from last year, and the customers and members who use Sparky for shopping spend 40% more per order than others who don’t. Someone recently shared with me that they asked Sparky for a weekly meal plan of healthy foods with high-protein options. Within a few seconds, Sparky shared recipes and meal kits, with the ability to add all the ingredients they needed in their basket with one click. Sparky even recognized the ingredients they had recently purchased both online and store. So they didn’t buy something they already had. It’s building trust.”
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