Walmart Inc.
08/28/2026 | Press release | Distributed by Public on 08/28/2026 14:12
Quarterly Report for Quarter Ending July 31, 2026 (Form 10-Q)
Management's Discussion and Analysis of Financial Condition and Results of Operations
Overview
This discussion, which presents Walmart Inc.'s ("Walmart," the "Company," "our," "us" or "we") results for periods occurring in the fiscal year ending January 31, 2027 ("fiscal 2027") and the fiscal year ended January 31, 2026 ("fiscal 2026"), should be read in conjunction with our Condensed Consolidated Financial Statements as of and for the three and six months ended July 31, 2026, and the accompanying notes included in Part I, Item 1 of this Quarterly Report on Form 10-Q, as well as our Consolidated Financial Statements as of and for the year ended January 31, 2026, the accompanying notes and the related Management's Discussion and Analysis of Financial Condition and Results of Operations, contained in our Annual Report on Form 10-K for the year ended January 31, 2026.
From time to time, we revise the measurement of each segment's operating income and other measures as determined by the information regularly reviewed by its chief operating decision maker. Beginning in February 2026, the Company updated its segment allocation methodology for certain corporate overhead allocations and, accordingly, revised the prior period amounts for comparability.
Recent Developments, Macroeconomic Conditions and Potential Impacts
We expect continued uncertainty in our business and the global economy due to the following factors: tariffs and trade restrictions, including tariff refunds; inflationary trends; fluctuations in global currencies; swings in macroeconomic conditions and their effect on consumer confidence; changes in employment trends; volatility in fuel prices; and supply chain pressures, any of which may impact our results. While we operate in a highly dynamic tariff environment, less than one third of what we sell in the U.S. is imported, with most of our imports coming from China, Vietnam, Mexico, India and Canada. We are committed to helping customers save money and live better through everyday low prices, supported by everyday low costs. Our operating results are influenced in part by our sourcing, pricing, merchandising, inventory management and other strategies in response to cost increases, which are further discussed in our Annual Report on Form 10-K. Information on certain risks, factors, and uncertainties that can affect our operating results and an investment in our securities can be found herein under "Item 1A. Risk Factors" and "Item 5. Other Information."
The Company engaged in the process established by the U.S. Customs and Border Protection ("CBP") for refunds of tariffs that the Company paid as the importer of record under the International Emergency Economic Powers Act. During the quarter ended July 31, 2026, the Company received approximately $2.9 billion in tariff refunds pursuant to the CBP process, which were recorded as a reduction to cost of sales and represent substantially all of the refunds requested by the Company. A significant portion of these refunds was invested into customer-focused initiatives during the current quarter, primarily through price investment and other cost mitigation strategies, with continued prioritization of price investment expected through fiscal 2027.
For a detailed discussion on results of operations by reportable segment, refer to "Results of Operations" below.
Company Performance Metrics
We are committed to helping customers save money and live better through everyday low prices, supported by everyday low costs. At times, we adjust our business strategies to maintain and strengthen our competitive positions in the countries in which we operate. We define our financial priorities as follows:
•Growth - serve customers through a seamless omnichannel experience;
•Margin - improve our operating income margin through productivity initiatives as well as category and business mix; and
•Returns - improve our Return on Investment through margin improvement and disciplined capital spend.
Growth
Our objective of prioritizing growth means we will focus on serving customers and members however they want to shop through our omnichannel business model. This includes increasing comparable store and club sales through increasing membership through Walmart+ and at Sam's Club U.S., accelerating eCommerce sales growth and expansion of omnichannel initiatives that complement our strategy.
Comparable sales is a metric that indicates the performance of our existing stores and clubs by measuring the change in sales for such stores and clubs, including eCommerce sales, for a particular period over the corresponding period in the previous year. Our discussion of our comparable sales below refers to our calendar comparable sales calculated using our fiscal calendar, which may result in differences when compared to comparable sales using the retail calendar (also known as the 4-5-4 calendar) as provided in our quarterly earnings releases. We report on comparable sales in the U.S. as we believe it is a meaningful metric within the context of the U.S. retail market where there is a single currency, one inflationary market and generally consistent store and club formats from year to year.
Calendar comparable sales, as well as the impact of fuel, for the three and six months ended July 31, 2026 and 2025, were as follows:
| Three Months Ended July 31, | Six Months Ended July 31, | |||||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||||||||||||||||||||||
| With Fuel | Fuel Impact | With Fuel | Fuel Impact | |||||||||||||||||||||||||||||||||||||||||||||||
| Walmart U.S. | 3.3 | % | 4.7 | % | 0.4 | % | (0.1) | % | 3.8 | % | 3.9 | % | 0.3 | % | (0.1) | % | ||||||||||||||||||||||||||||||||||
| Sam's Club U.S. | 8.6 | % | 3.3 | % | 4.2 | % | (2.6) | % | 7.3 | % | 3.1 | % | 3.2 | % | (2.6) | % | ||||||||||||||||||||||||||||||||||
Walmart U.S. comparable sales increased 3.3% and 3.8% for the three and six months ended July 31, 2026, respectively, driven by growth in transactions and average ticket, reflecting strength in grocery, partially offset by a decrease in health and wellness primarily due to the impact from maximum fair price regulation on certain prescription drugs, which went into effect in January 2026. Growth for the six months ended July 31, 2026 also reflects strength in general merchandise. Walmart U.S. eCommerce sales positively contributed approximately 4.9% and 5.1% to comparable sales for the three and six months ended July 31, 2026, respectively. This growth reflects continued strength in customer and Walmart+ member engagement with omnichannel offerings, which was primarily driven by store-fulfilled delivery.
Sam's Club U.S. comparable sales increased 8.6% and 7.3% for the three and six months ended July 31, 2026, respectively, with growth in transactions and unit volumes, reflecting strength in grocery and general merchandise. Additionally, higher fuel sales, driven by higher fuel prices and volumes, positively impacted comparable sales by 4.2% and 3.2% for the three and six months ended July 31, 2026, respectively. Sam's Club U.S. eCommerce sales positively contributed approximately 3.1% to comparable sales for both the three and six months ended July 31, 2026, reflecting continued strength in member engagement with omnichannel offerings, such as club-fulfilled delivery.
Margin
Our objective of prioritizing margin focuses on growth with a focus on incremental margin accretion through a combination of productivity improvements, as well as category and business mix. We invest in technology and process improvements to increase productivity, manage inventory and reduce costs, and we operate with discipline by managing expenses and optimizing the efficiency of how we work. We measure operating discipline through expense leverage, which we define as net sales growing at a faster rate than operating, selling, general and administrative ("operating") expenses. Additionally, we focus on our mix of businesses, including expanding our ecosystem in higher margin areas, such as digital advertising. Our objective over the long-term is to achieve operating income leverage, which we define as growing operating income at a faster rate than net sales.
| Three Months Ended July 31, | Six Months Ended July 31, | |||||||||||||||||||||||||
| (Amounts in millions) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||
| Net sales | $ | 186,100 | $ | 175,750 | $ | 361,784 | $ | 339,731 | ||||||||||||||||||
| Percentage change from comparable period | 5.9 | % | 4.8 | % | 6.5 | % | 3.7 | % | ||||||||||||||||||
| Operating income | $ | 9,383 | $ | 7,286 | $ | 16,876 | $ | 14,421 | ||||||||||||||||||
| Percentage change from comparable period | 28.8 | % | (8.2) | % | 17.0 | % | (2.4) | % | ||||||||||||||||||
|
Percentage of net sales
|
||||||||||||||||||||||||||
|
Gross profit(1)
|
25.4 | % | 24.5 | % | 24.9 | % | 24.3 | % | ||||||||||||||||||
| Operating expenses | 21.4 | % | 21.2 | % | 21.3 | % | 21.1 | % | ||||||||||||||||||
| Operating income | 5.0 | % | 4.1 | % | 4.7 | % | 4.2 | % | ||||||||||||||||||
(1) Gross profit defined as net sales less cost of sales.
Gross profit as a percentage of net sales ("gross profit rate") increased 96 and 53 basis points for the three and six months ended July 31, 2026, respectively, when compared to the same periods in the previous fiscal year, primarily due to tariff refunds, partially offset by price investments and higher fuel costs within our supply chain. Gross profit rate also benefited from continued growth in higher margin businesses, including advertising.
Operating expenses as a percentage of net sales increased 11 and 22 basis points for the three and six months ended July 31, 2026, respectively, when compared to the same periods in the previous fiscal year. The increase for the three months ended July 31, 2026 was primarily driven by higher self-insured general liability claims expense influenced by rising costs to resolve claims across retail and related industries, increased depreciation related to our capital investments and higher associate healthcare benefit costs related to increased enrollment and medical cost inflation. The increase for the six months ended July 31, 2026 was primarily driven by increased depreciation related to our capital investments, higher associate healthcare benefit costs and higher self-insured general liability claims expense. The increases for both the three and six months ended July 31, 2026 were partially offset by lapping charges of $0.4 billion related to certain legal matters for the same periods in the previous fiscal year.
Operating income as a percentage of net sales increased 89 and 42 basis points for the three and six months ended July 31, 2026, respectively, primarily due to the factors described above.
Returns
As we execute our financial framework, we believe our return on capital will improve over time. We measure return on capital with our return on investment and free cash flow metrics. In addition, we provide returns in the form of share repurchases and dividends, which are discussed in the Liquidity and Capital Resources section.
Return on Assets and Return on Investment
We include Return on Assets ("ROA") and Return on Investment ("ROI") as metrics to assess our return on capital. ROA is the most directly comparable measure based on our financial statements presented in accordance with generally accepted accounting principles in the U.S. ("GAAP") while ROI is considered a non-GAAP financial measure. Management believes ROI is a meaningful metric to share with investors because it helps investors assess how effectively Walmart is deploying its assets. Trends in ROI can fluctuate over time as management balances long-term strategic initiatives with possible short-term impacts.
Our calculation of ROI is considered a non-GAAP financial measure because it uses financial measures that differ from those used in ROA, the most directly comparable GAAP financial measure. ROA is consolidated net income for the period divided by average total assets for the period. We define ROI as operating income plus interest income, depreciation and amortization, and rent expense for the trailing 12 months divided by average invested capital during the period. We consider average invested capital to be the average of our beginning and ending total assets, plus average accumulated depreciation and amortization, less average accounts payable and average accrued liabilities for that period. Although ROI is a standard financial measure, numerous methods exist for calculating a company's ROI. As a result, the method used by management to calculate our ROI may differ from the methods used by other companies to calculate their ROI.
The calculation of ROA and ROI, along with a reconciliation of ROI to the calculation of ROA, the most comparable GAAP financial measure, is as follows:
| For the Trailing Twelve Months Ended July 31, | ||||||||||||||
| (Amounts in millions) | 2026 | 2025 | ||||||||||||
| CALCULATION OF RETURN ON ASSETS | ||||||||||||||
| Numerator | ||||||||||||||
| Consolidated net income | $ | 22,499 | $ | 21,929 | ||||||||||
| Denominator | ||||||||||||||
|
Average total assets(1)
|
$ | 282,376 | $ | 262,639 | ||||||||||
| Return on assets (ROA) | 8.0 | % | 8.3 | % | ||||||||||
| CALCULATION OF RETURN ON INVESTMENT | ||||||||||||||
| Numerator | ||||||||||||||
| Operating income | $ | 32,280 | $ | 28,988 | ||||||||||
| + Interest income | 352 | 442 | ||||||||||||
| + Depreciation and amortization | 15,094 | 13,491 | ||||||||||||
| + Rent | 2,559 | 2,374 | ||||||||||||
| = ROI operating income | $ | 50,285 | $ | 45,295 | ||||||||||
| Denominator | ||||||||||||||
|
Average total assets(1)
|
$ | 282,376 | $ | 262,639 | ||||||||||
|
'+ Average accumulated depreciation and amortization(1)
|
134,840 | 124,255 | ||||||||||||
|
'- Average accounts payable(1)
|
62,202 | 58,401 | ||||||||||||
|
- Average accrued liabilities(1)
|
29,448 | 28,239 | ||||||||||||
| = Average invested capital | $ | 325,566 | $ | 300,254 | ||||||||||
| Return on investment (ROI) | 15.4 | % | 15.1 | % | ||||||||||
(1)`The average is calculated using the account balance at the end of the current and prior comparative periods.
| As of July 31, | ||||||||||||||||||||
|
(Amounts in millions)
|
2026 | 2025 | 2024 | |||||||||||||||||
| Certain Balance Sheet Data | ||||||||||||||||||||
| Total assets | $ | 293,914 | $ | 270,837 | $ | 254,440 | ||||||||||||||
| Accumulated depreciation and amortization | 141,445 | 128,234 | 120,275 | |||||||||||||||||
| Accounts payable | 64,318 | 60,086 | 56,716 | |||||||||||||||||
| Accrued liabilities | 30,074 | 28,821 | 27,656 | |||||||||||||||||
ROA was 8.0% and 8.3% for the trailing 12 months ended July 31, 2026 and 2025, respectively. The decrease in ROA was primarily due to net decreases in the fair value of our equity and other investments and an increase in average total assets resulting from higher purchases of property and equipment, offset by an increase in operating income. ROI was 15.4% and 15.1% for the trailing 12 months ended July 31, 2026 and 2025, respectively. The increase in ROI was primarily due to an increase in operating income from improved business performance, partially offset by an increase in average invested capital due to higher purchases of property and equipment.
Capital Allocation
Our strategy includes allocating the majority of our capital to higher-return areas focused on automation such as eCommerce, supply chain and store and club investments. The following table provides additional detail regarding our capital expenditures:
| (Amounts in millions) | Six Months Ended July 31, | |||||||||||||
| Allocation of Capital Expenditures | 2026 | 2025 | ||||||||||||
|
Supply chain, customer-facing initiatives, technology and other
|
$ | 7,659 | $ | 6,688 | ||||||||||
| Store and club remodels | 3,623 | 2,917 | ||||||||||||
| New stores and clubs, including expansions and relocations | 1,087 | 577 | ||||||||||||
| Total U.S. | $ | 12,369 | $ | 10,182 | ||||||||||
| Walmart International | 1,812 | 1,227 | ||||||||||||
| Total Capital Expenditures | $ | 14,181 | $ | 11,409 | ||||||||||
Free Cash Flow
Free cash flow is considered a non-GAAP financial measure. Management believes, however, that free cash flow, which measures our ability to generate additional cash from our business operations, is an important financial measure for use in evaluating the Company's financial performance. Free cash flow should be considered in addition to, rather than as a substitute for, consolidated net income as a measure of our performance and net cash provided by operating activities as a measure of our liquidity. See Liquidity and Capital Resources for discussions of GAAP metrics including net cash provided by operating activities, net cash used in investing activities and net cash provided by financing activities.
We define free cash flow as net cash provided by operating activities in a period minus payments for property and equipment made in that period. Walmart's definition of free cash flow is limited in that it does not represent residual cash flows available for discretionary expenditures due to the fact that the measure does not deduct the payments required for debt service and other contractual obligations or payments made for business acquisitions. Therefore, we believe it is important to view free cash flow as a measure that provides supplemental information to our Condensed Consolidated Statements of Cash Flows.
Although other companies report their free cash flow, numerous methods may exist for calculating a company's free cash flow. As a result, the method used by management to calculate our free cash flow may differ from the methods used by other companies to calculate their free cash flow.
The following table sets forth a reconciliation of free cash flow, a non-GAAP financial measure, to net cash provided by operating activities, which we believe to be the GAAP financial measure most directly comparable to free cash flow, as well as information regarding net cash used in investing activities and net cash provided by financing activities.
| Six Months Ended July 31, | ||||||||||||||
| (Amounts in millions) | 2026 | 2025 | ||||||||||||
| Net cash provided by operating activities | $ | 19,710 | $ | 18,352 | ||||||||||
| Payments for property and equipment | (14,181) | (11,409) | ||||||||||||
| Free cash flow | $ | 5,529 | $ | 6,943 | ||||||||||
|
Net cash used in investing activities(1)
|
$ | (14,264) | $ | (11,199) | ||||||||||
| Net cash used in financing activities | (4,842) | (6,993) | ||||||||||||
(1) Net cash used in investing activities includes payments for property and equipment, which is also included in our computation of free cash flow.
Net cash provided by operating activities was $19.7 billion for the six months ended July 31, 2026, which represents an increase of $1.4 billion when compared to the same period in the previous fiscal year. The increase was primarily due to an increase in cash provided by operating income, partially offset by timing of inventory receipts. Free cash flow for the six months ended July 31, 2026 was $5.5 billion, which represents a decrease of $1.4 billion when compared to the same period in the previous fiscal year. The decrease in free cash flow was due to an increase of $2.8 billion in capital expenditures to support our omnichannel growth strategy, partially offset by the increase in net cash provided by operating activities described above.
Results of Operations
Consolidated Results of Operations
| Three Months Ended July 31, | Six Months Ended July 31, | |||||||||||||||||||||||||
| (Dollar amounts and retail square feet in millions) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||
| Net sales | $ | 186,100 | $ | 175,750 | $ | 361,784 | $ | 339,731 | ||||||||||||||||||
| Percentage change from comparable period | 5.9 | % | 4.8 | % | 6.5 | % | 3.7 | % | ||||||||||||||||||
|
Membership and other income(1)
|
1,837 | 1,652 | 3,904 | 3,280 | ||||||||||||||||||||||
| Total revenues | 187,937 | 177,402 | 365,688 | 343,011 | ||||||||||||||||||||||
| Percentage change from comparable period | 5.9 | % | 4.8 | % | 6.6 | % | 3.7 | % | ||||||||||||||||||
|
Gross profit(2)
|
47,296 | 42,979 | 89,922 | 82,657 | ||||||||||||||||||||||
|
Operating expenses(2)
|
39,750 | 37,345 | 76,950 | 71,516 | ||||||||||||||||||||||
| Operating income | 9,383 | 7,286 | 16,876 | 14,421 | ||||||||||||||||||||||
| Other (gains) and losses | 1,200 | (2,708) | 925 | (2,111) | ||||||||||||||||||||||
| Consolidated net income | $ | 6,529 | $ | 7,151 | $ | 12,019 | $ | 11,790 | ||||||||||||||||||
| Percentage of net sales | ||||||||||||||||||||||||||
| Gross profit | 25.4 | % | 24.5 | % | 24.9 | % | 24.3 | % | ||||||||||||||||||
| Operating expenses | 21.4 | % | 21.2 | % | 21.3 | % | 21.1 | % | ||||||||||||||||||
| Operating income | 5.0 | % | 4.1 | % | 4.7 | % | 4.2 | % | ||||||||||||||||||
|
Unit counts at period end
|
11,000 | 10,797 | 11,000 | 10,797 | ||||||||||||||||||||||
|
Retail square feet at period end
|
1,058 | 1,052 | 1,058 | 1,052 | ||||||||||||||||||||||
(1) Membership and other income includes membership fees and other items such as rental and tenant income, recycling income, gift card breakage income, as well as other income from corporate campus facilities.
(2) Gross profit is defined as net sales less cost of sales. Operating expenses refers to operating, selling, general and administrative expenses.
Our total revenues increased $10.5 billion or 5.9% and $22.7 billion or 6.6% for the three and six months ended July 31, 2026, respectively, when compared to the same periods in the previous fiscal year. The increases were primarily due to strong positive comparable sales in our U.S. segments and international markets driven by growth in transactions. eCommerce net sales grew $8.2 billion or 23% and $16.7 billion or 24% for the three and six months ended July 31, 2026, respectively, primarily driven by store and club-fulfilled delivery. Net sales growth also reflected strong sales in grocery and general merchandise across our segments. Net sales for the three and six months ended July 31, 2026 were positively affected by $1.5 billion and $3.9 billion, respectively, in currency exchange rate fluctuations.
Membership and other income increased $0.2 billion or 11.2% and $0.6 billion or 19.0% for the three and six months ended July 31, 2026, respectively, primarily due to strong growth in membership income globally. Growth in the six months ended July 31, 2026 also reflects increases in certain miscellaneous items, none of which are individually material.
Gross profit rate increased 96 and 53 basis points for the three and six months ended July 31, 2026, respectively, when compared to the same periods in the previous fiscal year. The increases were primarily driven by tariff refunds, partially offset by price investments and higher fuel costs within our supply chain. Gross profit rate also benefited from continued growth in higher margin businesses, including advertising.
Operating expenses as a percentage of net sales increased 11 and 22 basis points for the three and six months ended July 31, 2026, respectively, when compared to the same periods in the previous fiscal year. The increase for the three months ended July 31, 2026 was primarily driven by higher self-insured general liability claims expense influenced by rising costs to resolve claims across retail and related industries, increased depreciation related to our capital investments and higher associate healthcare benefit costs related to increased enrollment and medical cost inflation. The increase for the six months ended July 31, 2026 was primarily driven by increased depreciation related to our capital investments, higher associate healthcare benefit costs and higher self-insured general liability claims expense. The increases for both the three and six months ended July 31, 2026 were partially offset by lapping charges of $0.4 billion related to certain legal matters for the same periods in the previous fiscal year.
Other gains and losses consist of certain non-operating items, such as the change in the fair value of our investments and gains or losses on business dispositions, which by their nature can fluctuate from period to period. Other gains and losses for the three and six months ended July 31, 2026 consisted of net losses of $1.2 billion and $0.9 billion, respectively, compared to net gains of $2.7 billion and $2.1 billion for the same periods in the previous fiscal year. These net gains and losses primarily consisted of changes in fair value of our equity and other investments driven by changes in their underlying stock prices.
Our effective income tax rate was 18.5% and 20.7% for the three and six months ended July 31, 2026, respectively, compared to 23.3% and 23.0% for the same periods in the previous fiscal year. The decreases in effective tax rate were primarily due to changes in unrecognized tax benefits. Our effective income tax rate may fluctuate as a result of various factors, including changes in our unrecognized tax benefits, valuation allowances, business operations, acquisitions, investments, entry into new businesses and geographies, intercompany transactions, changes in tax law, changes in the administrative practices, principles, and interpretations related to tax and the mix and size of earnings among our U.S. operations and international operations, which are subject to statutory rates that may be different than the U.S. statutory rate.
As a result of the factors discussed above, as well as an interest expense benefit related to changes in unrecognized tax benefits, consolidated net income decreased $0.6 billion and increased $0.2 billion for the three and six months ended July 31, 2026, respectively, when compared to the same periods in the previous fiscal year. Accordingly, diluted net income per common share attributable to Walmart was $0.80 and $1.46 for the three and six months ended July 31, 2026, respectively, which represents a decrease of $0.08 and an increase of $0.03 when compared to the same periods in the previous fiscal year.
Walmart U.S. Segment
| Three Months Ended July 31, | Six Months Ended July 31, | |||||||||||||||||||||||||
| (Dollar amounts and retail square feet in millions) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||
| Net sales | $ | 125,189 | $ | 120,911 | $ | 242,358 | $ | 233,074 | ||||||||||||||||||
| Net sales percentage change from comparable period | 3.5 | % | 4.8 | % | 4.0 | % | 4.0 | % | ||||||||||||||||||
| Calendar comparable sales increase | 3.3 | % | 4.7 | % | 3.8 | % | 3.9 | % | ||||||||||||||||||
|
Membership and other income
|
750 | 649 | 1,676 | 1,285 | ||||||||||||||||||||||
| Gross profit | 36,838 | 33,674 | 69,367 | 64,485 | ||||||||||||||||||||||
| Operating expenses | 29,468 | 27,591 | 57,026 | 53,342 | ||||||||||||||||||||||
| Operating income | $ | 8,120 | $ | 6,732 | $ | 14,017 | $ | 12,428 | ||||||||||||||||||
| Percentage of net sales | ||||||||||||||||||||||||||
| Gross profit | 29.4 | % | 27.9 | % | 28.6 | % | 27.7 | % | ||||||||||||||||||
| Operating expenses | 23.5 | % | 22.8 | % | 23.5 | % | 22.9 | % | ||||||||||||||||||
| Operating income | 6.5 | % | 5.6 | % | 5.8 | % | 5.3 | % | ||||||||||||||||||
| Unit counts at period end | 4,615 | 4,606 | 4,615 | 4,606 | ||||||||||||||||||||||
| Retail square feet at period end | 699 | 698 | 699 | 698 | ||||||||||||||||||||||
Net sales for the Walmart U.S. segment increased $4.3 billion or 3.5% and $9.3 billion or 4.0%, for the three and six months ended July 31, 2026, respectively, when compared to the same periods in the previous fiscal year. The increases were due to comparable sales of 3.3% and 3.8% for the three and six months ended July 31, 2026, respectively, driven by growth in transactions and average ticket, reflecting strength in grocery, partially offset by a decrease in health and wellness primarily due to the impact from maximum fair price regulation on certain prescription drugs, which went into effect in January 2026. Growth for the six months ended July 31, 2026 also reflects strength in general merchandise. The Walmart U.S. segment's eCommerce net sales positively contributed approximately 4.9% and 5.1% to comparable sales for the three and six months ended July 31, 2026, respectively. This growth reflects continued strength in customer and Walmart+ member engagement with omnichannel offerings, which was primarily driven by store-fulfilled delivery.
Membership and other income increased 15.6% and 30.4% for the three and six months ended July 31, 2026, respectively, primarily driven by double-digit percentage growth in membership fee revenue from Walmart+. Growth during the six months ended July 31, 2026 also reflects increases in certain miscellaneous items.
Gross profit rate increased 158 and 95 basis points for the three and six months ended July 31, 2026, respectively, when compared to the same periods in the previous fiscal year. The increases were primarily driven by tariff refunds, partially offset by price investments and higher fuel costs within our supply chain. Gross profit rate also benefited from continued growth in higher margin businesses, including advertising.
Operating expenses as a percentage of net sales increased 72 and 64 basis points for the three and six months ended July 31, 2026, respectively, when compared to the same periods in the previous fiscal year. The increase for the three months ended July 31, 2026 was primarily driven by higher self-insured general liability claims expense, increased depreciation related to our capital investments and higher associate healthcare benefit costs related to increased enrollment and medical cost inflation. The increase for the six months ended July 31, 2026 was primarily driven by higher associate healthcare benefit costs, increased depreciation related to our capital investments and higher self-insured general liability claims expense.
As a result of the factors discussed above, operating income increased $1.4 billion and $1.6 billion for the three and six months ended July 31, 2026, respectively, when compared to the same periods in the previous fiscal year.
Walmart International Segment
| Three Months Ended July 31, | Six Months Ended July 31, | ||||||||||||||||||||||||||||
| (Dollar amounts and retail square feet in millions) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||||
| Net sales | $ | 35,198 | $ | 31,201 | $ | 70,308 | $ | 60,955 | |||||||||||||||||||||
| Percentage change from comparable period | 12.8 | % | 5.5 | % | 15.3 | % | 2.6 | % | |||||||||||||||||||||
| Membership and other income | 426 | 381 | 851 | 760 | |||||||||||||||||||||||||
| Gross profit | 7,539 | 6,729 | 14,962 | 13,019 | |||||||||||||||||||||||||
| Operating expenses | 6,526 | 5,876 | 12,772 | 11,252 | |||||||||||||||||||||||||
| Operating income | $ | 1,439 | $ | 1,234 | $ | 3,041 | $ | 2,527 | |||||||||||||||||||||
| Percentage of net sales | |||||||||||||||||||||||||||||
| Gross profit | 21.4 | % | 21.6 | % | 21.3 | % | 21.4 | % | |||||||||||||||||||||
| Operating expenses | 18.5 | % | 18.8 | % | 18.2 | % | 18.5 | % | |||||||||||||||||||||
| Operating income | 4.1 | % | 4.0 | % | 4.3 | % | 4.1 | % | |||||||||||||||||||||
| Unit counts at period end | 5,783 | 5,591 | 5,783 | 5,591 | |||||||||||||||||||||||||
| Retail square feet at period end | 278 | 274 | 278 | 274 | |||||||||||||||||||||||||
Net sales for the Walmart International segment increased $4.0 billion or 12.8% and $9.4 billion or 15.3% for the three and six months ended July 31, 2026, respectively, when compared to the same periods in the previous fiscal year. The increases were primarily due to positive comparable sales across our international markets, including strong eCommerce growth of $1.6 billion and $3.6 billion for the three and six months ended July 31, 2026, respectively. Currency exchange rate fluctuations positively contributed $1.5 billion and $3.9 billion for the three and six months ended July 31, 2026, respectively.
Gross profit rate decreased 15 and 8 basis points for the three and six months ended July 31, 2026, respectively, when compared to the same periods in the previous fiscal year. The decreases were primarily due to price investments and ongoing format mix shifts, partially offset by improved eCommerce margins and business mix shifts. Additionally for the three months ended July 31, 2026, the rate was negatively impacted by a discrete sales-related reserve.
Operating expenses as a percentage of net sales decreased 29 basis points for both the three and six months ended July 31, 2026, when compared to the same periods in the previous fiscal year. The decreases were primarily due to disciplined cost controls and ongoing format mix shifts, partially offset by investments in strategic growth priorities in our Mexico and Canada markets.
As a result of the factors discussed above, operating income increased $0.2 billion and $0.5 billion for the three and six months ended July 31, 2026, respectively, when compared to the same periods in the previous fiscal year.
Sam's Club U.S. Segment
| Three Months Ended July 31, | Six Months Ended July 31, | ||||||||||||||||||||||||||||
| (Dollar amounts and retail square feet in millions) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||||
| Including Fuel | |||||||||||||||||||||||||||||
| Net sales | $ | 25,713 | $ | 23,638 | $ | 49,118 | $ | 45,702 | |||||||||||||||||||||
| Percentage change from comparable period | 8.8 | % | 3.4 | % | 7.5 | % | 3.2 | % | |||||||||||||||||||||
| Calendar comparable sales increase | 8.6 | % | 3.3 | % | 7.3 | % | 3.1 | % | |||||||||||||||||||||
| Membership and other income | 654 | 617 | 1,328 | 1,224 | |||||||||||||||||||||||||
| Gross profit | 2,919 | 2,576 | 5,593 | 5,153 | |||||||||||||||||||||||||
| Operating expenses | 2,895 | 2,723 | 5,569 | 5,241 | |||||||||||||||||||||||||
| Operating income | $ | 678 | $ | 470 | $ | 1,352 | $ | 1,136 | |||||||||||||||||||||
| Percentage of net sales | |||||||||||||||||||||||||||||
| Gross profit | 11.4 | % | 10.9 | % | 11.4 | % | 11.3 | % | |||||||||||||||||||||
| Operating expenses | 11.3 | % | 11.5 | % | 11.3 | % | 11.5 | % | |||||||||||||||||||||
| Operating income | 2.6 | % | 2.0 | % | 2.8 | % | 2.5 | % | |||||||||||||||||||||
| Unit counts at period end | 602 | 600 | 602 | 600 | |||||||||||||||||||||||||
| Retail square feet at period end | 81 | 80 | 81 | 80 | |||||||||||||||||||||||||
|
Excluding Fuel (1)
|
|||||||||||||||||||||||||||||
| Net sales | $ | 22,139 | $ | 21,185 | $ | 42,656 | $ | 40,924 | |||||||||||||||||||||
| Percentage change from comparable period | 4.5 | % | 6.0 | % | 4.2 | % | 5.8 | % | |||||||||||||||||||||
| Operating income | $ | 485 | $ | 314 | $ | 1,000 | $ | 843 | |||||||||||||||||||||
(1) We believe the Excluding Fuel information is useful to investors because it permits investors to understand the effect of the Sam's Club U.S. segment's fuel sales on its results of operations, which are impacted by the volatility of fuel prices. Volatility in fuel prices may continue to impact the operating results of the Sam's Club U.S. segment in the future.
Net sales for the Sam's Club U.S. segment increased $2.1 billion or 8.8% and $3.4 billion or 7.5% for the three and six months ended July 31, 2026, respectively, when compared to the same periods in the previous fiscal year. The increases were primarily due to comparable sales, including fuel, of 8.6% and 7.3% for the three and six months ended July 31, 2026, respectively, with growth in transactions and unit volumes, reflecting strength in grocery and general merchandise. Additionally, higher fuel sales, driven by higher fuel prices and volumes, positively impacted comparable sales by 4.2% and 3.2% for the three and six months ended July 31, 2026, respectively. Sam's Club U.S. eCommerce net sales positively contributed approximately 3.1% to comparable sales for both the three and six months ended July 31, 2026, reflecting continued strength in member engagement with omnichannel offerings, such as club-fulfilled delivery.
Membership and other income increased 6.0% and 8.5% for the three and six months ended July 31, 2026, when compared to the same periods in the previous fiscal year. The increases were primarily due to growth in the membership base and Plus penetration. Growth during the six months ended July 31, 2026 also reflects increases in certain miscellaneous items. As previously reported, Sam's Club U.S. increased its annual membership fees, effective May 1, 2026. Membership fees are deferred and recognized ratably over the one-year membership term.
Gross profit rate increased 45 and 11 basis points for the three and six months ended July 31, 2026, respectively, when compared to the same periods in the previous fiscal year. The increases were primarily due to tariff refunds, partially offset by price investments and increased eCommerce shipping and fulfillment costs, driven by club-fulfilled delivery.
Operating expenses as a percentage of net sales decreased 26 and 13 basis points for the three and six months ended July 31, 2026, respectively, when compared to the same periods in the previous fiscal year. The decreases for both the three and six months ended July 31, 2026 were primarily driven by higher fuel sales, offset by continued technology investments and higher self-insured general liability claims expense.
As a result of the factors discussed above, operating income increased $0.2 billion for both the three and six months ended July 31, 2026, when compared to the same periods in the previous fiscal year.
Liquidity and Capital Resources
Liquidity
The strength and stability of our operations have historically supplied us with a significant source of liquidity. Our cash flows provided by operating activities, supplemented with our long-term debt and short-term borrowings, have been sufficient to fund our operations while allowing us to invest in activities that support the long-term growth of our operations. Generally, some or all of the remaining available cash flow has been used to fund dividends on our common stock and share repurchases. We believe our sources of liquidity will continue to be sufficient to fund operations, finance our investment activities, pay dividends and fund our share repurchases for at least the next 12 months and for the foreseeable future.
Net Cash Provided by Operating Activities
| Six Months Ended July 31, | ||||||||||||||
| (Amounts in millions) | 2026 | 2025 | ||||||||||||
| Net cash provided by operating activities | $ | 19,710 | $ | 18,352 | ||||||||||
Net cash provided by operating activities for the six months ended July 31, 2026 increased $1.4 billion when compared to the same period in the previous fiscal year. The increase was primarily due to an increase in cash provided by operating income, partially offset by timing of inventory receipts.
Cash Equivalents and Working Capital Deficit
Cash and cash equivalents were $11.5 billion and $9.4 billion at July 31, 2026 and 2025, respectively. Our working capital deficit was $26.9 billion as of July 31, 2026, which increased when compared to the $21.5 billion working capital deficit as of July 31, 2025. The increase in our working capital deficit was primarily driven by an increase in short-term borrowings for general corporate purposes as well as the timing of certain payments described above, partially offset by timing of inventory receipts, increase in receivables related to sales growth and higher cash balances. We generally operate with a working capital deficit due to our efficient use of cash in funding operations, consistent access to the capital markets and returns provided to our shareholders in the form of cash dividends and share repurchases.
As of July 31, 2026 and January 31, 2026, cash and cash equivalents of $5.0 billion and $3.9 billion, respectively, may not be freely transferable to the U.S. due to local laws or other restrictions or are subject to the approval of the noncontrolling interest shareholders.
Net Cash Used in Investing Activities
| Six Months Ended July 31, | ||||||||||||||
| (Amounts in millions) | 2026 | 2025 | ||||||||||||
| Net cash used in investing activities | $ | (14,264) | $ | (11,199) | ||||||||||
Net cash used in investing activities for the six months ended July 31, 2026 increased $3.1 billion when compared to the same period in the previous fiscal year. The increase was primarily due to increased payments for property and equipment and change in net proceeds received from sales of certain strategic investments in the previous fiscal year.
Net Cash Used in Financing Activities
| Six Months Ended July 31, | ||||||||||||||
| (Amounts in millions) | 2026 | 2025 | ||||||||||||
| Net cash used in financing activities | $ | (4,842) | $ | (6,993) | ||||||||||
Net cash used in financing activities decreased $2.2 billion for the six months ended July 31, 2026, when compared to the same period in the previous fiscal year. The decrease was primarily due to higher short-term borrowings and lower share repurchases, primarily offset by increased debt repayments in the current fiscal year.
In April 2026, the Company renewed and extended its existing 364-day revolving credit facility of $10.0 billion as well as its five-year credit facility of $5.0 billion. In total, we had committed lines of credit in the U.S. of $15.0 billion at July 31, 2026, all undrawn.
Long-term Debt
The following table provides the changes in our long-term debt for the six months ended July 31, 2026:
| (Amounts in millions) | Long-term debt due within one year | Long-term debt | Total | |||||||||||||||||
| Balances as of February 1, 2026 | $ | 3,542 | $ | 34,624 | $ | 38,166 | ||||||||||||||
|
Proceeds from issuance of long-term debt(1)
|
- | 4,230 | 4,230 | |||||||||||||||||
| Repayments of long-term debt | (2,303) | - | (2,303) | |||||||||||||||||
| Reclassifications of long-term debt | 2,249 | (2,249) | - | |||||||||||||||||
|
Currency and other adjustments
|
(18) | (143) | (161) | |||||||||||||||||
| Balances as of July 31, 2026 | $ | 3,470 | $ | 36,462 | $ | 39,932 | ||||||||||||||
(1)Proceeds from issuance of long-term debt are net of deferred loan costs and any related discount or premium.
During the six months ended July 31, 2026, our total outstanding long-term debt increased $1.8 billion, primarily due to the issuance of new long-term debt in April 2026, less current year debt repayments. Refer to Note 3 to our Condensed Consolidated Financial Statements for details.
Dividends
Effective February 19, 2026, the Company approved the fiscal 2027 annual dividend of $0.99 per share, an increase over the fiscal 2026 annual dividend of $0.94 per share. For fiscal 2027, the annual dividend was or will be paid in four quarterly installments of $0.2475 per share, according to the following record and payable dates:
| Record Date | Payable Date | |||||||
| March 20, 2026 | April 6, 2026 | |||||||
| May 8, 2026 | May 26, 2026 | |||||||
| August 21, 2026 | September 8, 2026 | |||||||
| December 11, 2026 | January 4, 2027 | |||||||
The dividend installments payable on April 6, 2026 and May 26, 2026 were paid as scheduled.
Company Share Repurchase Program
From time to time, the Company repurchases shares of its common stock under share repurchase programs authorized by the Company's Board of Directors. All repurchases made during the six months ended July 31, 2026 prior to February 23, 2026 were made under the program in effect at the beginning of fiscal 2027. In February 2026, the Company approved a new $30 billion share repurchase program, which beginning on February 23, 2026, replaced the previous share repurchase program. As of July 31, 2026, authorization for $25.1 billion of share repurchases remained under the current share repurchase program. Any repurchased shares are constructively retired and returned to an unissued status.
We regularly review share repurchase activity and consider several factors in determining when to execute share repurchases, including, among other things, current cash needs, capacity for leverage, cost of borrowings, our results of operations and the market price of our common stock. We anticipate that a majority of the ongoing share repurchase program will be funded through the Company's free cash flow.
The following table provides, on a settlement date basis, share repurchase information for the six months ended July 31, 2026 and 2025:
| Six Months Ended July 31, | |||||||||||
| (Amounts in millions, except per share data) | 2026 | 2025 | |||||||||
| Total number of shares repurchased | 42.3 | 67.4 | |||||||||
| Average price paid per share | $ | 120.71 | $ | 92.03 | |||||||
| Total amount paid for share repurchases | $ | 5,104 | $ | 6,200 | |||||||
During the six months ended July 31, 2026, the Company repurchased $5.1 billion in shares of its common stock, a decrease of $1.1 billion as compared to the same period in the previous fiscal year. The decrease was primarily driven by opportunistic prices during the first quarter of fiscal 2026 as part of the Company's long-term strategy.
Material Cash Requirements
Material cash requirements from operating activities primarily consist of inventory purchases, employee related costs, taxes, interest and other general operating expenses, which we expect to be primarily satisfied by our cash from operations. Other material cash requirements from known contractual and other obligations include short-term borrowings, long-term debt and related interest payments, leases and purchase obligations.
Capital Resources
We believe our cash flows from operations, current cash position, short-term borrowings and access to capital markets will continue to be sufficient to meet our anticipated cash requirements and contractual obligations, which includes funding seasonal buildups in merchandise inventories and funding our capital expenditures, acquisitions, dividend payments and share repurchases.
We have strong commercial paper and long-term debt ratings that have enabled and should continue to enable us to refinance our debt as it becomes due at favorable rates in capital markets. As of July 31, 2026, the ratings assigned to our commercial paper and rated series of our outstanding long-term debt were as follows:
| Rating agency | Commercial paper | Long-term debt | ||||||||||||
| Standard & Poor's | A-1+ | AA | ||||||||||||
| Moody's Investors Service | P-1 | Aa2 | ||||||||||||
| Fitch Ratings | F1+ | AA | ||||||||||||
Credit rating agencies review their ratings periodically and, therefore, the credit ratings assigned to us by each agency may be subject to revision at any time. Accordingly, we are not able to predict whether our current credit ratings will remain consistent over time. Factors that could affect our credit ratings include changes in our operating performance, the general economic environment, conditions in the retail industry, our financial position, including our total debt and capitalization, and changes in our business strategy. Any downgrade of our credit ratings by a credit rating agency could increase our future borrowing costs or impair our ability to access capital and credit markets on terms commercially acceptable to us. In addition, any downgrade of our current short-term credit ratings could impair our ability to access the commercial paper markets with the same flexibility that we have experienced historically, potentially requiring us to rely more heavily on more expensive types of debt financing. The credit rating agency ratings are not recommendations to buy, sell or hold our commercial paper or debt securities. Each rating may be subject to revision or withdrawal at any time by the assigning rating organization and should be evaluated independently of any other rating. Moreover, each credit rating is specific to the security to which it applies.
Other Matters
In Note 5 to our Condensed Consolidated Financial Statements, which is captioned "Contingencies" and appears in Part I of this Quarterly Report on Form 10-Q under the caption "Item 1. Financial Statements," we discuss, under the sub-caption "Opioid-Related Litigation," certain opioid-related matters and certain risks arising therefrom. In Note 5, we discuss, "Asda Equal Value Claims" the Company's indemnification obligation for the Asda Equal Value Claims matter, "Money Transfer Agent Services Matter," a government investigation by the U.S. Attorney's Office for the Middle District of Pennsylvania into the Company's consumer fraud prevention and anti-money laundering compliance related to the Company's money transfer agent services, as well as matters related to independent contractor drivers on the driver platform under "Driver Platform Matters." In Note 5, under "Mexico Antitrust Matter," we also discuss a quasi-judicial administrative process initiated by COFECE against Walmex and Walmex's related constitutional challenge. In Note 5 we also discuss show cause notices and requests issued by the Directorate of Enforcement to Flipkart regarding Foreign Direct Investment rules and regulations in India and an India Antitrust Matter. We reference various legal proceedings related to the Prescription Opiate Litigation, the DOJ Opioid Civil Litigation and False Claims Act Litigation; Asda Equal Value Claims; Money Transfer Agent Services Matter; Federal Trade Commission and State Attorneys General Driver Platform Litigation; Mexico Antitrust Matter; and an India Antitrust Matter in Part II of this Quarterly Report on Form 10-Q under the caption "Item 1. Legal Proceedings," under the caption "I. Supplemental Information." We also discuss an environmental matter with the U.S. Environmental Protection Agency in Part II of this Quarterly Report on Form 10-Q under the caption "Item 1. Legal Proceedings," under the sub-caption "II. Environmental Matters." The foregoing matters and other matters described elsewhere in this Quarterly Report on Form 10-Q represent contingent liabilities of the Company that may or may not result in the incurrence of a material liability by the Company upon their final resolution.
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