Walmart Earnings Miss Target: Here's What Its CEO Is Doing To Combat Impending Tariff Pains

Walmart delivered a mixed set of second-quarter results, underscoring the pressures of rising costs and tariffs on the world's biggest retailer. Adjusted earnings per share came in at $0.68 (£0.51), missing Wall Street estimates of around $0.73 (£0.54). It marked a rare earnings miss for the company, even as total revenue climbed nearly 5% to $177.4 billion (£132.1 billion), topping analyst forecasts.

Despite the profit shortfall, Walmart raised its full-year outlook, citing strong consumer demand, e-commerce momentum, and robust membership growth. Executives now project earnings of $2.52–$2.62 per share (£1.88–£1.95) and sales growth of up to 4.75% in the coming quarter.

What's In Their Earnings Results?

Walmart reported that US same-store sales rose 4.6%, while global e-commerce surged 25%. Despite cost pressures weighing on profit, Walmart raised its full-year guidance, now projecting EPS of $2.52–$2.62 (£1.88-£1.95) and sales growth of 3.75–4.75% for Q3.

They have also taken note that its global advertising business grew 46%, including VIZIO and Walmart Connect in the US by up to 31%. Moreover, its membership and other income increased by 5.4%, including a 15.3% growth in membership income globally.

Speaking of memberships, Sam's Club US continued to experience steady growth in member counts, renewal rates, and increased penetration of Plus members, resulting in a 7.6% growth in membership income for the segment. In contrast, Walmart+ membership income grew in double digits. Within International, membership income rose 27%.

Keeping Prices Low–Amidst Tariff Pains

Speaking to CNBC, Chief Financial Officer John David Rainey explained that Walmart is intensifying efforts to hold down prices. He noted the retailer is accelerating the flow of imports from international suppliers and expanding the use of Rollbacks—temporary in-store discounts—to give shoppers more relief at the checkout.

'This is managed on an item-by-item and category-by-category basis,' he said. 'There are certainly areas where we have fully absorbed the impact of higher tariff costs. There are other areas where we've had to pass some of those costs along.'

However, he also noted that 'tariff-impacted costs are continuing to rise.'

Rainey emphasised that customer spending habits have remained steady. He pointed out that sales of Walmart's private-label products—usually cheaper alternatives to national brands—showed little movement compared with the same period a year earlier.

'Everyone is looking to see if there are any creaks in the armour or anything that's happening with the consumer, but it's been very consistent,' he said. 'They continue to be very resilient.'

More on Its Advertising Revenue

It is worth mentioning that one of the revenue drivers for Walmart lately has been its advertising business, which has since received a boost following a commitment from The Trade Desk, one of its partners, who has enhanced Walmart Connect.

In a recent blog, The Trade Desk mentioned that since 2021, Walmart Connect's independent demand-side platform has merged The Trade Desk's advanced technology and performance capabilities with Walmart's vast first-party, omnichannel data. This integration enables advertisers to optimise their campaigns and get more value out of their total media investments.

'Objectivity is a significant factor here. Unlike others in the market, our goal is to drive the use of retail media across as many advertiser campaigns as possible. We do not compete with retailers. And only an independent objective partner like us can truly help advertisers unlock this opportunity,' The Trade Desk CEO Jeff Green said last week.

A Balancing Act Moving Forward

Walmart's latest quarter highlights the balancing act between rising costs, shifting economic pressures, and its efforts to strengthen long-term growth drivers. While tariffs and higher expenses weighed on profits, the company's strong sales momentum, expanding e-commerce business, and rapidly growing advertising arm provided meaningful offsets.

With Walmart Connect delivering double-digit growth and leadership reaffirming its commitment to price competitiveness, the retailer is positioning itself not only to weather near-term challenges but also to diversify revenue streams and deepen customer loyalty. Together, these strategies underscore Walmart's resilience and its focus on sustaining market share gains in a highly competitive retail landscape.

Walmart may have fallen short on profits, but with strong sales, soaring digital performance, and an advertising arm firing on all cylinders, it has proved it can balance tariff pains with growth drivers that will sustain its dominance in global retail.