Walmart reported strong second-quarter revenue of $187.9 billion, exceeding analyst estimates. However, the stock dropped 5-7% as the company provided a cautious outlook. A timing shift in Flipkart's 'Big Billion Days' sale is expected to impact third-quarter growth by over 1 percentage point, leading the revised full-year guidance to fall short of analyst expectations.
Walmart Inc. reported strong financial results for the second quarter of fiscal year 2027, with total revenue rising 5.9% year-on-year to reach $187.9 billion. The company’s adjusted earnings per share (EPS) of $0.81 outperformed the analyst consensus estimate of $0.74, driven by robust performance in its e-commerce and advertising divisions. Despite these solid numbers, the stock fell approximately 5-7% following the announcement, reflecting investor disappointment with the company's forward-looking guidance.
Global e-commerce sales grew by 23%, while global advertising revenue surged by 38% during the quarter. Within the international segment, Flipkart Ads played a crucial role in maintaining growth momentum. However, a strategic change in the scheduling of Flipkart’s major annual event, the 'Big Billion Days' sale, created an unexpected hurdle. The timing shift, moving portions of the event between the third and fourth quarters, is projected to reduce Walmart’s third-quarter sales growth by more than 1 percentage point.
While Walmart raised its full-year fiscal 2027 outlook, the revised projection for adjusted EPS to be between $2.80 and $2.87 was lower than the $2.90 estimate expected by the market. Since Walmart shares have been trading at a valuation multiple of roughly 40 times earnings, the market showed little tolerance for guidance that did not meet higher analyst expectations. Even with the strong top-line growth, the stock faced selling pressure as investors weighed the cautious near-term outlook against the company's core business performance.
Looking ahead, the primary uncertainty remains the impact of broader economic conditions on consumer spending. The company continues to face competition in both the retail and digital commerce sectors, which keeps profit margins under constant watch. Investors are likely to focus on the actual sales performance in the third and fourth quarters to determine if the 'Big Billion Days' timing shift was indeed just a one-time adjustment or if it masks any softening in underlying consumer demand.