Walmart’s Q2 results show how retail growth is changing
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Walmart’s latest earnings show how the economics of large-scale retail are changing.
The company reported revenue of $187.9 billion for the second quarter of fiscal 2027, up 5.9% from a year earlier. Global e-commerce sales increased 23%, while adjusted earnings per share reached $0.81. Walmart also raised its full-year sales and operating income forecasts.
Yet investors focused on a weaker part of the report. Walmart US comparable sales, excluding fuel, increased 2.6%, down from 4.6% in the same quarter last year.
Part of that slowdown came from pharmacy pricing. Walmart said pharmacy deflation related to maximum fair price regulation reduced comparable sales growth by approximately 125 basis points. Transactions still increased 1.5%, while the average ticket rose 1.1%.
The sales figure matters, but it does not explain the full direction of the business.
Walmart is getting more growth from activities linked to a retail purchase. E-commerce, marketplace services, advertising, fulfillment and memberships are becoming more important to the company.
For retailers, logistics providers and manufacturers, that change could prove more important than one quarter of comparable sales growth.
E-commerce is becoming part of Walmart’s core operating model
Walmart US e-commerce sales increased 24% during the quarter. The way those orders are being filled also shows how the company is changing the role of its stores.
Store-fulfilled delivery grew approximately 43%. Around 37% of those orders were delivered in less than three hours.
That changes how a physical store can be used.
A large store network once gave retailers a way to put products close to shoppers. It can now also put inventory close to online customers. Walmart can use stores as local fulfillment points instead of relying only on separate e-commerce distribution centers.
This can reduce the distance between inventory and the customer. It can also give Walmart more options when deciding where an online order should be picked, packed and sent.
For supply chain leaders, the wider lesson is that store and online operations are becoming harder to separate.
Retailers that once treated stores, warehouses and e-commerce as separate channels increasingly need them to work as one network. Inventory visibility, order management and last-mile capacity are becoming part of the customer experience.
Walmart’s size makes its model difficult to copy. But the basic principle applies more widely. Existing physical assets can become more valuable when they are linked to online demand and faster fulfillment.
Walmart is finding more revenue around each transaction
A second change is taking place in Walmart’s revenue mix.
Global advertising revenue increased 38% in the quarter. Walmart Connect in the US rose 43%, excluding VIZIO. Global membership fee revenue increased 17%, while Walmart US marketplace sales rose 52%.
These businesses allow Walmart to earn money beyond the margin on a product sale.
A third-party seller can pay Walmart for marketplace access and fulfillment. A consumer brand can pay to advertise to shoppers. A customer can pay for a membership. Walmart can therefore earn several forms of revenue from the same retail network and customer base.
The company said nearly half of its marketplace business flowed through fulfillment services during the quarter. It is also expanding its marketplace platform outside the US.
This matters because traditional retail often operates on thin product margins and high operating costs. Advertising, marketplace fees, fulfillment services and memberships can improve the revenue mix.
Walmart’s results also show that retail scale has value beyond buying power.
Customer traffic can support an advertising business. Logistics capacity can support third-party sellers. Customer relationships can support memberships. A marketplace can widen the product range without requiring Walmart to own every item of inventory.
As these businesses grow, store sales alone provide a less complete view of a retailer’s performance.
The sales slowdown still carries a warning for retailers
Walmart’s 2.6% comparable sales growth should not be overlooked.
The figure explains why investors remain sensitive to shifts in consumer demand. Walmart’s scale also means its sales trends are often watched for signs of broader changes in household spending.
The company is continuing to compete hard on price. Walmart said it introduced more than 11,000 price rollbacks during the quarter. It also received nearly $2.9 billion in tariff refunds and said some of that benefit was directed toward lower prices.
At the same time, Walmart raised its fiscal 2027 outlook. It now expects constant-currency net sales to increase 4% to 5%, compared with its original forecast of 3.5% to 4.5%. Adjusted operating income is expected to increase 7% to 8.5%.
Together, these figures show the challenge facing large retailers.
They must keep prices attractive while paying for faster delivery, technology and supply chain capacity. They also need additional sources of revenue to support those investments without depending only on higher product prices.
Walmart is addressing that pressure by linking stores, digital commerce, advertising, fulfillment and memberships more closely.
Its second-quarter results therefore offer a wider view of where large-scale retail may be heading. Future competition could depend as much on the services surrounding a purchase as on the product sale itself.
For companies across retail and the supply chain, that places more value on logistics networks, digital platforms and services that can generate revenue from infrastructure already in place.
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