Walmart's Q2 2026 Earnings: E-commerce Surge and AI Integration Boost Growth

Walmart Q2 Sales Rise 5 Percent | The Motley Fool

Walmart(WMT -4.36%) reported fiscal second quarter 2026 earnings (period ended August 2, 2025) on August 21, 2025, highlighting 5.6% constant currency revenue growth and 25% global e-commerce expansion. Consolidated adjusted operating income increased 0.4% year-over-year despite a $450 million incremental general liability claims expense, while full-year sales growth guidance for fiscal 2026 was raised by 75 basis points to 3.75%-4.75%. The following analysis provides insight into strategic shifts in e-commerce, margin resiliency, and AI acceleration. Global e-commerce sales rose 25% year-over-year in the fiscal second quarter, including 26% growth in U.S. e-commerce and strong marketplace participation, with 44% of marketplace volumes flowing through Walmart Fulfillment Services (WFS). Sam's Club and Walmart International both delivered more than 20% e-commerce growth year-over-year, while advertising grew 46% globally, and membership income increased over 15% year-over-year in the quarter. "As our business model evolves, contributions to operating income are increasingly influenced by a diverse set of interrelated drivers. Including improved e-commerce economics and business mix, most notably from higher margin areas, like advertising and membership fees. Walmart US e-commerce profitability continued to increase in Q2. As we make progress on improving net delivery costs and see strong momentum in advertising. We invested in marketing to improve awareness of Walmart's value, convenience, and assortment. Install growth in active customers and frequency, With strong growth in e-commerce, our advertising business globally increased nearly 50% including Visio. Walmart Connect in the US, ex VIZIO, grew more than 30%." -- John David Rainey, CFO The acceleration of higher-margin businesses such as advertising and membership is structurally increasing Walmart's profit resilience by reducing dependency on low-margin core retail. Walmart recorded $450 million in additional general liability and workers' compensation claims, constituting a 560 basis point headwind to adjusted operating income growth; nonetheless, U.S. segment margins remained intact due to proactive inventory and pricing management. Over 7,400 price rollbacks were offered, up nearly 2,000 from the fiscal first quarter 2026, with a 30% year-over-year increase in grocery rollbacks to offset tariff-driven cost increases. "Our business is able to overcome the additional expenses and still deliver profit growth. The model we're building gives us more price and wage flexibility, and it also means we're better positioned when unusual items come our way." -- Doug McMillon, CEO Such demonstrated operational agility safeguards market share and sustains profit growth even when faced with unpredictable external shocks such as tariffs or legal claims. Walmart created new executive roles focused specifically on AI product management and platform architecture, and launched early-stage deployment of 'super agents' like Sparky, the customer-facing virtual assistant embedded in its app. "For a few quarters now, I've been commenting on our use of artificial intelligence. Our enthusiasm for how AI can help us serve customers and members better, improve the experience for our associates, and increase productivity continues to grow. It's been years since we made a structural change for a role reporting to the CEO, and we've done it in this case because we're clear on a path to accelerate. Daniel Denker has joined us to lead AI acceleration product management, design, tech prioritization, and AI-related change management. Daniel brings tremendous expertise and experience from places like Instacart and Uber. We also announced a new role reporting to Suresh Kumar, our chief technology officer, that will focus on AI platforms. This role will help us increase innovation, speed, and productivity. Own the AI platforms, and architect our intelligent system stack. We're building agents into the core of how we operate. Including four super agents, there'll be many agents that roll up to these super agents that our customers, associates, and other stakeholders experience. First is Sparky. Sparky is the customer-facing assistant you see smiling at the bottom of our app. Today, Sparky takes us from traditional search to intelligent AI-powered assistance. Sparky will develop agentic capabilities over time. Customers are giving us positive feedback, and we're excited about the roadmap ahead. As we improve and scale Sparky, make it even smarter and more personalized. It'll be the primary digital vehicle for discovery, shop, and for managing everything from reorders to returns. We see Sparky becoming an indispensable part of how people shop with us." -- Doug McMillon, CEO Investing in proprietary AI infrastructure at executive level positions Walmart to unlock significant labor productivity, personalized shopping, and rapid fulfillment advantages over time, which could enhance cost efficiency and long-term competitiveness. Management raised constant currency full-year sales growth guidance to 3.75%-4.75% and expects fiscal third quarter sales growth within the same range. Adjusted operating income growth guidance remains unchanged at 3.5%-5.5%, fully absorbing unplanned claims expenses, with fiscal third quarter operating income targeted for 3%-6% growth. Walmart is launching the OnePay cash rewards credit card before the holidays.

Grocery Helps Walmart US eCommerce Sales Surge 26% | PYMNTS.com

By completing this form, you agree to receive marketing communications from PYMNTS and to the sharing of your information with our sponsor, if applicable, in accordance with our Privacy Policy and Terms and Conditions. The company's Thursday (Aug. 21) earnings release indicated that eCommerce sales were 26% higher than a year ago and digital sales for grocery were up double digits. Store-fulfilled delivery of grocery items were up 50%. Though a slight miss on earnings -- where costs are rising in the wake of tariffs -- sent shares lower by about 2% in intraday trading, the retail behemoth raised its full year guidance. Net sales are projected to grow in a range of 3.75% to 4.75% for the fiscal year. That's higher than the 3% to 4% range that had previously been in place. Comparable sales in the quarter were up 4.6% in the U.S., outpaced by Sam's Club growth of at 5.9%. During the conference call with analysts, CEO Doug McMillon said that all segments posted eCommerce sales growth north of 20%, and overall, "sales were stronger than we expected when we started the quarter." Sales were positive across all general merchandise categories. As for the marketplace, McMillon said: "Globally, we grew our marketplace by 17% and membership 0income by 15%. We grew global advertising by 46%, including VIZIO. Walmart Connect in the U.S. was up 31%, and that excludes VIZIO. These strong growth rates in our newer businesses continue to change the shape of our income statement," and boosted profits, in a move that overcomes tariff impacts. With a nod to those tariffs, McMillon said: "We're doing what we said we would do. We're keeping our prices as low as we can for as long as we can. Our merchants have been creative and acted with urgency to avoid what would have been additional pressure for our customers and members. They've done a terrific job managing pricing and mix across merchandise categories. They managed to generate rollbacks." McMillon told analyst that spending by U.S. consumers has "been generally consistent. We aren't seeing dramatic shifts. The way things have played out so far, the impact of tariffs has been gradual enough that any behavioral adjustments by the customer have been somewhat muted. But as we replenish inventory at post-tariff price levels, we've continued to see our costs increase each week, which we expect will continue into the third and fourth quarters. Not surprisingly, we see more adjustments in middle- and lower-income households than we do with higher-income households." He noted too, that "in discretionary categories where item prices have gone up, we see a corresponding moderation in units at the item level as customers switch to other items or, in some cases, categories." McMillon also told analysts that artificial intelligence (AI) remains a key focus, as the digital assistant Sparky, tied to the company's app, will develop agentic capabilities over time. "As we improve and scale Sparky, we'll make it even smarter and more personalized. It'll be the primary digital vehicle for discovery, shopping and for managing everything from reorders to returns ... The other super agents we're building include one for associates that'll bring everything into one place, from scheduling to sales data. [There's also] one for our suppliers, sellers and advertisers that they will use to manage things like onboarding, orders and campaigns." CFO John Rainey said that the comp sales growth reflected "ongoing share gains across key categories and all income cohorts, with upper-income households contributing the largest gains" and said later in the call that membership fee income was up 15% across the enterprise. Sam's Club continued to see steady growth in member counts, renewal rates and increased penetration of Plus members, resulting in 7.6% membership income growth, while Walmart Plus membership income grew double digits, according to commentary. "I'm also really excited about the upcoming launch of our new One Pay Cash Rewards credit card, which should be available before the holiday" shopping season, Rainey said. The CFO added: "It is a kind of a nuanced earnings report given some of the cost pressures. But when you dig into the details, particularly of the eCommerce business, you look at things like membership growth of 16%, advertising growing 50% year over year, 30% in the U.S ... You can go line by line and you can see why we're excited about the momentum in the business." As he told analysts, "we are more than just a standard brick-and-mortar retail business. We have a much more diversified set of profit streams now that are both higher growing as well as higher margin."