Walmart Inc (WMT.O): EPS Beat Though US Comps a Little Soft (Hurt by Health/Wellness MFP Dynamic)

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20 Aug 2026 08:30:04 ET │ 11 pages

Walmart Inc (WMT.O)

EPS Beat Though US Comps a Little Soft (Hurt by Health/Wellness MFP

Dynamic)

CITI'S TAKE

2Q EPS were well above consensus, driven by higher GM, while sales at

WMT US and Sam's fell short of consensus. EPS were $0.81 (cons $0.74,

guidance $0.72-0.74). EPS helped by the net benefit from tariff refunds

(we estimate $0.05-0.06). WMT US Comps +2.6% vs cons+4.6% and

Sam’s comps ex fuel +4.4% vs cons of +5.9%. Intl sales +7.9% cc and

+12.8% as reported vs cons +5.5%. GM +100bps (cons +10bps) and

+160bps at WMT US, though helped by 30bps overall and 40-50bps at

WMT US from tariff refunds. Mgmt raised F26 guidance from $2.752.85 to $2.80-2.87 (cons $2.87). They raised by the amt of the 2Q EPS

beat (exclude the tariff refund benefit). Excluding the Health/Wellness

category, US comps were +3.4%, With WMT’s relatively high multiple, the

WMT US result is likely to weigh on the stock today. Still, we believe WMT

remains well-positioned to win in this environment.

Buy

Price (19 Aug 26 16:00)

Target price

Expected share price

return

Expected dividend yield

Expected total return

Market Cap

Paul Lejuez, CFA, CPAAC

Tracy Kogan

The Qtr — Adj EPS of $0.81 vs our est of $0.79, Visible Alpha cons $0.74 and

guidance $0.72-0.74. Total revs +5.1% cc and +5.9% as reported (vs guidance +4.05.0% cc, 4.9-5.9% as reported and consensus 5.3%), with WMT US Comps +2.6% vs

cons+4.6%, Sam’s comps ex fuel +4.4% vs cons of +5.9% and Intl sales +7.9% cc

and +12.8% as reported vs cons +5.5%. US Ecom +24% (vs +26% LY and +26% in

1Q). Within WMT US, Grocery +MSD (vs +MSD LY and +MSD in 1Q), Health and

Wellness -LSD (vs + mid teens LY and +LSD in 1Q) and Gen merch +LSD (vs +LSD LY

and +MSD in 1Q). Transactions +1.5%, ticket +1.1%. GM +100bps (vs consensus

+10bps) and +160bps at WMT US, and SG&A deleverage 40bps (vs consensus

20bps of leverage). Reported op income growth was 17.4% cc in the qtr, though the

presentation notes that excluding the net benefit of tariff refunds, total op income

growth would have been at the high end of guidance (10.0% cc). We estimate that

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