Walmart is expected to deliver another solid quarterly performance when it reports second-quarter results Thursday, but investors are preparing for a notable moderation in U.S. same-store sales growth. Bloomberg consensus estimates call for comparable sales to increase 3.7%, which would represent the retailer’s slowest second-quarter pace since 2020.

The expected slowdown comes as Walmart has made thousands of price cuts to remain competitive and protect customer traffic. At the same time, higher gasoline prices linked to the Iran conflict and broader inflation are putting pressure on household budgets. The combination creates a more complicated earnings picture: Walmart may continue gaining market share while customers become more selective about how much they spend.

E-Commerce and Membership Revenue Could Offset Retail Pressure

Analysts expect several of Walmart’s faster-growing businesses to help compensate for slower comparable-store sales. E-commerce sales are projected to increase 22% globally, while U.S. online sales are expected to rise 4.5%. Promotions introduced around Amazon’s Prime Day event may have contributed to stronger digital activity during the quarter.

Membership revenue, advertising, merchant services and last-mile delivery are also becoming increasingly important to Walmart’s financial model. Telsey Advisory Group analyst Joe Feldman expects these businesses to help operating income grow faster than overall sales, potentially providing support for profitability even if consumers reduce spending per visit.

Wall Street expects shoppers to have visited Walmart more frequently during the quarter while spending less on each trip. That pattern would demonstrate the retailer’s ability to attract value-conscious consumers, but it could also highlight the pressure inflation and higher transportation costs are placing on household purchasing power.

Guidance Could Be More Important Than the Earnings Beat

The market may place greater emphasis on Walmart’s updated outlook than on whether the company simply exceeds quarterly earnings expectations. Walmart previously projected second-quarter net sales growth of 4% to 5% and adjusted earnings of $0.72 to $0.74 per share in constant currency. Analysts currently expect earnings of approximately $0.75 per share.

Investors will also be looking for updates on the back-to-school season and preparations for the holiday period. Management’s commentary will be particularly important because Walmart previously maintained a relatively conservative full-year fiscal 2027 outlook, calling for revenue growth of 3.5% to 4.5% and adjusted earnings of $2.75 to $2.85 per share.

Higher fuel costs remain a significant risk. CFO John David Rainey previously estimated that increased fuel prices could create hundreds of millions of dollars in pressure. At the same time, potential refunds from tariffs could provide a meaningful offset. Walmart has indicated that it could qualify for a refund equivalent to roughly 0.5% of annual U.S. sales, which would represent approximately $2.4 billion based on 2025 revenue. Going forward, investors will watch whether Walmart can sustain market-share gains and e-commerce growth while absorbing higher costs and maintaining its value proposition. The balance between aggressive pricing, consumer demand and profitability will likely determine whether the retailer can extend its strong performance into the second half of the fiscal year.