Walmart Inc (NYSE: WMT) delivered a fiscal Q2 earnings beat on August 20, 2026, but the stock slid about 6% in premarket trading as investors focused on a sharp slowdown in U.S. comparable sales and guidance that fell short of elevated expectations.
The retail giant reported adjusted earnings per share of $0.81, above the $0.74 consensus estimate, while revenue rose 5.9% year-over-year to $187.9 billion, topping forecasts of about $186.75 billion. Net income came in at $6.5 billion, also beating the $5.91 billion estimate. However, Walmart-only U.S. comparable sales grew just 2.6%, well below the 3.67% analysts had expected and the slowest U.S. sales growth in six years.
Mizuho analyst David Bellinger described the print as a "worst-case scenario" and one of the biggest misses from Walmart in years. The stock traded around $107.40 in premarket, down from $114.30. The reaction built on existing pressure: WMT was already down roughly 15% since its previous earnings report in May, weighed down by concerns over lower-income consumer spending and inflation tied to the Iran War.
Ahead of the release, Globalt Investments portfolio manager Keith Buchanan said he had been impressed with Walmart's execution but viewed the shares as a valuation concern. At the time, Walmart traded at a forward price-to-earnings ratio near 40x, compared with roughly 25x for Nvidia. Options activity also signaled downside risk, with a put-to-call ratio of 2.53 on weekly contracts and a lower price target around $112.
There were notable bright spots. Global e-commerce sales grew 23%, supported by store-fulfilled pickup, delivery and marketplace growth. Global advertising revenue surged 38%, with Walmart U.S. advertising up the same amount. The gross profit rate increased 96 basis points, and operating income rose 28.8% on a reported basis, or 17.4% on an adjusted constant-currency basis.
Walmart raised its full-year adjusted EPS guidance to a range of $2.80 to $2.87, up from the prior $2.75 to $2.85, and now expects net sales growth of 4% to 5% in constant currency. Still, analysts had been looking for roughly $2.90 per share and 5.5% sales growth, so the improved outlook missed the high bar. CFO John David Rainey noted the company is receiving billions in tariff refunds, but those funds will go toward price cuts and customer experience investments rather than margin expansion. For Q3, Walmart guided net sales growth of 3% to 3.75% and adjusted operating income growth of 2% to 4%, while flagging a more than 100-basis-point headwind from the timing shift of Flipkart's Big Billion Days between Q3 and Q4.
Despite the selloff, Wall Street remains broadly supportive. Of 45 analysts tracked by FactSet, all but seven are bullish on Walmart, with an average price target near $140, implying more than 20% potential upside over the next 12 months.
