EARNINGS RESULTS · Q2 2027

Walmart Q2 2027: Revenue Up 5.94%, Operating Margin 4.99%

Results for the quarter ended 2026-07-31 bring the business drivers and cash after investment into focus. Quarterly free cash flow was $7.48 bn. The dated assessment on 2026-10-07 was avoid at a reference price of $107.2.

Walmart · WMTPublished October 8, 2026Quarter ended July 31, 2026

Q2 2027: What the Quarter Delivered

Revenue: $187.94 bn
Revenue growth YoY: 5.9%
Operating income: $9.38 bn
Operating margin: 5%
Diluted EPS, GAAP: $0.8

Walmart reported $187.94 bn of revenue in Q2 2027. Revenue rose 5.94% from the comparable prior-year quarter. Operating profit was $9.38 bn, with an operating margin of 4.99%. Reported diluted EPS was $0.8.

Reported revenue advanced against the comparable fiscal quarter, and operating income strengthened, but the apparent improvement needs careful interpretation.

How Revenue Reached Operating Profit

The quarter's revenue and operating result imply an operating margin of 4.99%: $4.99 of operating profit for every $100 of revenue, before interest and tax.

Removing that benefit would leave operating profit below the comparable fiscal quarter, so the headline result should not be mistaken for recurring operating leverage.

What the Reported Earnings Include

Other non-operating income: -$1.2 bn
GAAP net income: $6.53 bn
Diluted weighted-average shares: 7.98 bn shares

Q2 2027 GAAP net income was $6.53 bn. Other non-operating income was -$1.2 bn.

Other non-operating losses replaced the prior comparable quarter’s gains, helping explain why consolidated net income and diluted earnings per share declined despite the stronger reported operating result.

Our model excludes non-operating gains and losses and treats recurring financing costs, taxes and share dilution separately; it does not present reported earnings as normalized profit.

Cash Left After Investment

Operating cash flow: $42.92 bn
OCF less cash PPE purchases, plus PPE sales: $13.7 bn
Quarterly operating cash flow: $14.97 bn
Quarterly cash CapEx: $7.5 bn
Quarterly OCF less cash PPE purchases: $7.48 bn

In Q2 2027, operating cash flow of $14.97 bn less cash capital expenditure of $7.5 bn left $7.48 bn of free cash flow. Operations funded cash investment and left cash after that spending.

Positive trailing cash remaining after investment supports financial flexibility; it does not make normalized earnings interchangeable with distributable cash.

The Verdict Recorded on 2026-10-07

Verdict Invest recorded avoid on 2026-10-07, using a reference price of $107.2 dated 2026-10-06. This assessment relates to the Q2 2027 results, with a 12-month horizon and stated validity through 2026-11-06.

Confirmation to watch: Results without tariff refunds reveal the underlying operating margin.
Confirmation to watch: Continued digital sales growth produces operating leverage rather than merely adding fulfillment costs.
Confirmation to watch: Cash generation after property purchases improves while diluted shares continue to decline.
Risk to this assessment: Persistent underlying margin expansion and stronger cash conversion make the model's profitability assumptions too conservative.
Risk to this assessment: Grocery demand weakens or digital fulfillment costs erode the economics of growth.
Risk to this assessment: Capital spending persistently absorbs operating cash generation, undermining shareholder distributions.