Retail behemoth Walmart (NASDAQ: WMT) reported Q2 CY2026 results beating Wall Street’s revenue expectations, with sales up 5.9% year on year to $187.9 billion. On the other hand, next quarter’s revenue guidance of $185.6 billion was less impressive, coming in 1.4% below analysts’ estimates. Its non-GAAP profit of $0.81 per share was 9.3% above analysts’ consensus estimates.
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Walmart (WMT) Q2 CY2026 Highlights:
- Revenue: $187.9 billion vs analyst estimates of $186.8 billion (5.9% year-on-year growth, 0.6% beat)
- Adjusted EPS: $0.81 vs analyst estimates of $0.74 (9.3% beat)
- Revenue Guidance for Q3 CY2026 is $185.6 billion at the midpoint, below analyst estimates of $188.3 billion
- Management raised its full-year Adjusted EPS guidance to $2.84 at the midpoint, a 1.3% increase
- Operating Margin: 5%, in line with the same quarter last year
- Free Cash Flow Margin: 4%, similar to the same quarter last year
- Same-Store Sales rose 2.6% year on year (4.8% in the same quarter last year)
- Market Capitalization: $909.6 billion
Company Overview
Known for its large-format Supercenters, Walmart (NASDAQ: WMT) is a retail pioneer that serves a budget-conscious consumer who is looking for a wide range of products under one roof.
Revenue Growth
Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years.
With $735.8 billion in revenue over the past 12 months, Walmart is a behemoth in the consumer retail sector and benefits from economies of scale, giving it an edge in distribution. This also enables it to gain more leverage on its fixed costs than smaller competitors and the flexibility to offer lower prices. However, its scale is a double-edged sword because there is only so much real estate to build new stores, placing a ceiling on its growth. For Walmart to boost its sales, it likely needs to adjust its prices or lean into foreign markets.
As you can see below, Walmart’s sales grew at a tepid 5.3% compounded annual growth rate over the last three years, but to its credit, it opened new stores and increased sales at existing, established locations.
This quarter, Walmart reported year-on-year revenue growth of 5.9%, and its $187.9 billion of revenue exceeded Wall Street’s estimates by 0.6%. Company management is currently guiding for a 3.4% year-on-year increase in sales next quarter.
Looking further ahead, sell-side analysts expect revenue to grow 4.5% over the next 12 months, similar to its three-year rate. This projection is particularly noteworthy for a company of its scale and indicates the market is baking in success for its products.
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Store Performance
Number of Stores
A retailer’s store count influences how much it can sell and how quickly revenue can grow.
Walmart has generally opened new stores over the last two years and averaged 1.6% annual growth, faster than the broader consumer retail sector.
When a retailer opens new stores, it usually means it’s investing for growth because demand is greater than supply, especially in areas where consumers may not have a store within reasonable driving distance.
Note that Walmart reports its store count intermittently, so some data points are missing in the chart below.
Same-Store Sales
The change in a company’s store base only tells one side of the story. The other is the performance of its existing locations and e-commerce sales, which informs management teams whether they should expand or downsize their physical footprints. Same-store sales provides a deeper understanding of this issue because it measures organic growth at brick-and-mortar shops for at least a year.
Walmart has been one of the most successful retailers over the last two years thanks to skyrocketing demand within its existing locations. On average, the company has posted exceptional year-on-year same-store sales growth of 4.5%. This performance suggests its measured rollout of new stores is beneficial for shareholders. We like this backdrop because it gives Walmart multiple ways to win: revenue growth can come from new stores, e-commerce, or increased foot traffic and higher sales per customer at existing locations.
In the latest quarter, Walmart’s same-store sales rose 2.6% year on year. This growth was a deceleration from its historical levels, showing the business is still performing well but losing a bit of steam.
Key Takeaways from Walmart’s Q2 Results
We were impressed by how significantly Walmart blew past analysts’ gross margin expectations this quarter. We were also glad its EPS outperformed Wall Street’s estimates. On the other hand, its EPS guidance for next quarter missed and its full-year EPS guidance fell short of Wall Street’s estimates. Overall, this was a softer quarter. The stock traded down 5.9% to $107.62 immediately following the results.
Walmart’s earnings report left more to be desired. Let’s look forward to see if this quarter has created an opportunity to buy the stock. The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).
