Walmart Ecommerce Grows 24% as Gas Prices Slow U.S. Store Sales

A Split Quarter at the World's Largest Retailer

Walmart's latest results split in two directions. Its digital business grew at roughly the pace of the last two-plus years, while the rest of its U.S. business slowed sharply, and higher fuel prices are the most likely reason. For the fiscal second quarter ended in July, Walmart U.S. comparable sales rose 2.6% while U.S. ecommerce sales climbed 24%.3 Global ecommerce grew 23% and now makes up about 24% of the company's total net sales.5

Readers can take one of two stories from that pair of numbers. In the first, the American shopper is weakening. In the second, Walmart's online operation has become strong enough to carry a business whose physical stores are feeling the squeeze at the gas pump. The coverage supports both readings to some degree. The more defensible conclusion is that gas prices are eating into discretionary spending, and ecommerce is the main reason Walmart's U.S. growth stayed positive.

What the Numbers Show

Total revenue reached $187.9 billion, up 5.9% from a year earlier, or 5.1% in constant currency.3 Operating income rose 28.8%, and Walmart raised its full-year outlook to net sales growth of 4% to 5% and adjusted operating income growth of 7% to 8.5%.3 On their face, those are the numbers of a company doing well.

The U.S. comparable sales figure is the one that worried investors. One analysis put the 2.6% gain well below the roughly 3.8% analysts expected and called it Walmart's weakest U.S. growth in about six years.12 Another account put the consensus estimate nearer 3.5%. It said the result was the slowest since late 2020 and that the stock had its worst session in four years.14 The reports disagree slightly on the size of the miss, but they agree it was a real miss.

The slowdown builds over the past year. U.S. comps grew 4.5% in the quarter reported in November 20254 and 4.6% in the holiday quarter.6 They rose 4.1% in the first quarter of fiscal 20272 before falling to 2.6% this summer.3 Over the same stretch, U.S. ecommerce growth stayed in a narrow band: 28%4, then 27%6, then 24%3.

Walmart's own breakdown of the quarter is more moderate than the headlines. U.S. transactions excluding fuel rose 1.5% and average ticket rose 1.1%, while like-for-like inflation came to about 1.4%.5 Walmart also said a pharmacy deflation effect tied to new maximum-fair-price drug rules cut about 125 basis points from comps.3 Add that back and the underlying number is closer to the high-3% range. That is softer than earlier quarters but not a collapse.

The Gas-Price Mechanism

Walmart's management made the fuel connection directly. Chief financial officer John David Rainey said that once fuel prices passed $4 a gallon, the psychological effect began to change what consumers chose to buy, according to an account citing NBC News.14 The same report said the AAA national average was $4.27 in early September, up from $2.98 before U.S. and Israeli strikes on Iran, as fighting near the Strait of Hormuz pushed crude back toward $100.14

Fuel affects Walmart in two ways. First, it takes money out of shoppers' wallets. One analysis noted that every extra dollar spent at the pump is a dollar not spent elsewhere, and that even a discount-focused retailer has limits on how much trade-down it can capture.12 Second, it raises Walmart's own costs. Rainey has said the company expects more than $2 billion in additional fuel-related expenses this fiscal year, more than its original guidance assumed, if prices stay near current levels.1613 Speaking at a Goldman Sachs conference in September, a Walmart executive also pointed to rising transportation and fuel costs among higher costs of goods.11

The two pressures hit ecommerce in different ways. A shopper who would otherwise drive to the store can avoid that trip by ordering delivery, so in theory high fuel prices could push some demand online. But Walmart pays to run the delivery network, and roughly 80% of its ecommerce deliveries are sent from stores.17 Each of those last-mile trips now costs more. The real test is whether Walmart's digital business can keep growing profitably as delivery costs rise.

Why Ecommerce Is Carrying the Load

The U.S. online engine has been unusually consistent. A Walmart U.S. executive told the Goldman Sachs audience that the 24% gain was the 10th straight quarter of growth above 20%.11 Store-fulfilled delivery sales rose about 43%. Deliveries completed in under three hours made up about 37% of store-fulfilled orders. Marketplace sales jumped 52%.5 About 70% of home deliveries now arrive the same day or faster, and deliveries completed in 30 minutes or less doubled from a year earlier.17

One independent analysis did the math on how much the comp depends on digital. It said Walmart's quarterly filing credited ecommerce with about 4.9 percentage points of contribution to U.S. comparable sales. Against a total comp of 2.6%, that implies the store-led and other parts of the business subtracted more than two points.15 The analysis noted that the subtraction is its own estimate based on rounded figures, not a number Walmart disclosed.15 Even so, the takeaway holds: without its digital channel, Walmart U.S. comparable sales would likely have been negative this quarter.

A year ago, ecommerce added about 2.9 points to U.S. comps over the full fiscal year. In fiscal 2026 that rose to roughly 4.3 points, and global online sales reached about $150.4 billion.10 The digital business has gone from an extra source of growth to the main source of comparable-sales growth in the U.S.

Profitability Changes the Calculation

What separates this slowdown from earlier retail downturns is that Walmart's ecommerce operation now makes money. The company says the business has been profitable for six straight quarters, and the latest was its most profitable online quarter yet.11 Management added that ecommerce would have been profitable in the second quarter even without advertising.17

The businesses built on top of online shopping are growing faster than ecommerce itself. Walmart Connect, the U.S. retail-media arm, grew 43% excluding VIZIO.3 Walmart says the business earns margins of around 70%.11 Global membership-fee revenue grew 17%.8 Back in May, Rainey said advertising and memberships already accounted for about a third of Walmart's earnings.2 One market commentary described this as Walmart moving away from relying on high-volume, low-margin sales.18

This is why the gas squeeze looks manageable for Walmart, even though it hurts its customers. Store traffic is sensitive to fuel prices. Advertising is linked to marketplace growth and online engagement, and it is much less affected by how much shoppers spend on gas.

Where the Optimism Needs Caveats

Not all of the strength is repeatable. Walmart collected nearly $2.9 billion in tariff refunds. One analysis estimated those refunds added about 7.5 points to adjusted operating income growth, leaving underlying growth closer to 9.9% than the reported 17.4%.15 Walmart is spending part of that money on more than 11,000 price rollbacks15, plus nearly 2,000 more price cuts in September.13 That supports market share, but it is a one-time cushion and should not be treated as a trend.

Cash flow is also worth watching. First-half free cash flow fell $1.4 billion to $5.5 billion as capital spending rose, and inventory was up 6.7% from a year earlier.15 Third-quarter guidance calls for net sales growth of just 3% to 3.75% and adjusted operating income growth of 2% to 4%.3 Walmart is clearly expecting a slower period.

The macro data is not one-sided. Retail sales fell 0.6% in July, but August payrolls came in well ahead of forecasts, which suggests consumers are rationing because of fuel costs rather than losing their jobs.14 Walmart says it is still gaining share across income groups, with the biggest gains among higher-income households.5

The Bottom Line

The fair reading is that gas prices have slowed Walmart's U.S. sales growth, and its online business has kept that growth positive. For the online retail sector more broadly, Walmart's quarter suggests that fast delivery from stores and a growing marketplace can hold demand when shoppers are cutting back on trips. The open question is cost. If fuel stays above $4, Walmart's delivery network will cost more to run every quarter. Whether advertising and membership income can cover that, without help from tariff refunds, is the issue for the next two quarters.