Walmart Inc. 10-Q Summary: Quarter Ended July 31, 2026
Business Context and Reporting Period
This summary covers Walmart Inc.'s unaudited financial results for the quarterly period ended July 31, 2026, and the six months ended on that date. Walmart operates retail and wholesale stores, clubs, and eCommerce platforms globally, organized into three reportable segments: Walmart U.S., Walmart International, and Sam's Club U.S. The company reported 11,000 units at period end.
Key Financial Metrics
| Metric | Three Months Ended July 31, 2026 | Six Months Ended July 31, 2026 |
|---|---|---|
| Total Revenues | $187.9 billion | $365.7 billion |
| Net Sales | $186.1 billion | $361.8 billion |
| Operating Income | $9.4 billion | $16.9 billion |
| Net Income (Attributable to Walmart) | $6.4 billion | $11.7 billion |
| Diluted EPS | $0.80 | $1.46 |
| Operating Cash Flow (6 months) | $19.7 billion | |
| Free Cash Flow (6 months) | $5.5 billion | |
| Total Debt (Long-term + Current) | $39.9 billion | |
| Cash and Equivalents | $11.5 billion | |
| Gross Profit Margin | 25.4% | 24.9% |
| Operating Margin | 5.0% | 4.7% |
Material Changes vs. Prior Period
- Revenue Growth: Total revenues increased 5.9% year-over-year (YoY) for the quarter and 6.6% for the six-month period, driven by strong comparable sales in U.S. segments and international markets.
- Profitability: Operating income surged 28.8% YoY for the quarter and 17.0% for the six months. This was primarily due to a $2.9 billion reduction in cost of sales from tariff refunds received in the quarter.
- Net Income: Consolidated net income attributable to Walmart decreased 9.4% YoY for the quarter ($6.4B vs $7.0B) due to a swing in "Other (gains) and losses" from a $2.7B gain in the prior year to a $1.2B loss in the current year, largely driven by fair value changes in equity investments. However, net income increased 1.6% YoY for the six-month period.
- Segment Performance:
- Walmart U.S.: Comparable sales up 3.3% (quarter) and 3.8% (six months). Operating income up 20.6% YoY.
- Walmart International: Comparable sales up 12.8% (quarter) and 15.3% (six months), aided by favorable currency impacts ($1.5B and $3.9B respectively).
- Sam's Club U.S.: Comparable sales up 8.6% (quarter) and 7.3% (six months), significantly boosted by higher fuel sales and volumes.
- Capital Allocation: Capital expenditures increased to $14.2 billion for the six months (up $2.8B YoY), focusing on supply chain, automation, and store remodels. Share repurchases totaled $5.1 billion for the six months.
Outlook, Risks, and Unusual Items
- Tariff Refunds: The company received approximately $2.9 billion in tariff refunds during the quarter, recorded as a reduction to cost of sales. Management expects to continue investing in price initiatives through fiscal 2027.
- Legal Contingencies:
- Opioid Litigation: Ongoing multidistrict litigation and state/federal cases. The company cannot reasonably estimate potential losses beyond accrued amounts.
- Driver Platform: Settled with the FTC and certain states for a $100 million judgment (approx. $37 million accrued) regarding Spark Driver platform practices.
- Asda Equal Value Claims: Indemnification obligations remain for claims by former Asda employees; a hearing on the third phase is scheduled for November 2026.
- Antitrust Matters: Pending appeals regarding antitrust rulings in Mexico and ongoing investigations in India (Flipkart).
- Dividends and Buybacks: The annual dividend was increased to $0.99 per share for fiscal 2027. A new $30 billion share repurchase program was approved in February 2026, with $25.1 billion remaining authorized as of July 31, 2026.
- Risk Factors: Management cites uncertainty regarding tariffs, inflation, currency fluctuations, and supply chain pressures as key risks. The company maintains a working capital deficit of $26.9 billion, which is consistent with its efficient cash management model.
Investor Verification Checklist
- Verify the sustainability of the $2.9 billion tariff refund benefit and its impact on future cost of sales.
- Monitor the volatility of "Other (gains) and losses" related to fair value changes in equity investments, which significantly impacted net income.
- Assess the progress and potential financial impact of the Asda Equal Value Claims and ongoing Opioid litigation.
- Review the execution of the $30 billion share repurchase program and the timing of future buybacks relative to free cash flow generation.
- Track the impact of fuel price volatility on Sam's Club U.S. operating results.
- Confirm the status of the Mexico antitrust appeal and India regulatory investigations involving Flipkart.