Walmart Inc.

Results of Operations

Consolidated Results of Operations

(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

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

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

(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.