Walmart Beat Wall Street Estimates, and the Stock Still Fell 9%. Here’s Why That Matters for Sellers.
Walmart reported second-quarter earnings on August 20 that beat analyst expectations on revenue and profit, and shares still dropped more than 9% on the day. Sales rose 5.9% to $187.9 billion, ahead of the $186.8 billion analysts expected, with adjusted earnings per share of $0.81 against a $0.74 estimate. The market reaction wasn't about the quarter that just closed. It was about a specific number buried inside it, and about a marketplace story that's becoming impossible to ignore if you sell on Amazon.
The Number That Actually Moved the Stock
US comparable sales, excluding fuel, grew just 2.6% in the quarter, down from 4.1% in Q1 and missing what investors wanted to see. Roughly 125 basis points of that softness traces to a specific, identifiable cause: new Maximum Fair Pricing legislation hit pharmacy pricing directly. CFO John David Rainey told analysts that adjusting for that headwind, comps were effectively running closer to 3.5%, against operating income growth of 10% excluding tariff benefits, a profit-to-revenue ratio he said Walmart hasn't produced in two decades.
That distinction matters. A single regulatory headwind in one category is a different story than broad consumer pullback, and it's part of why Walmart raised its full-year guidance the same day the stock fell.
Walmart's Marketplace Just Had a Genuinely Big Quarter
Here's the part that should matter more to you than the stock price. Marketplace net sales in the US grew 52% in the quarter, and nearly 50% of that marketplace volume now flows through Walmart Fulfillment Services, up almost 400 basis points year over year. Walmart Connect, the retailer's advertising arm, grew 43% on its own, stripped of its Vizio connected TV business. Store-fulfilled delivery grew 40% alongside it.
Those three numbers together, marketplace sales, fulfillment penetration, and advertising, describe the exact same flywheel that made Amazon's third-party business the engine it is today: a growing seller base, an increasing share of them using Walmart's own fulfillment infrastructure, and an advertising layer monetizing the traffic on top of it. Rainey put a number on how much this now matters to Walmart's bottom line directly: almost half of the company's incremental profit growth came from membership, advertising, and Walmart Marketplace combined, a share that's been climbing steadily quarter over quarter.
Why This Changes the Calculation for Amazon-First Sellers
If you've treated Walmart Marketplace as a small, operationally cumbersome experiment rather than a serious second channel, this quarter is a real data point against that assumption. A 52% marketplace growth rate paired with rising Walmart Fulfillment Services adoption means Walmart is actively pushing sellers toward the same fulfillment-plus-advertising bundle that made Amazon's FBA-plus-PPC combination so effective, and it's scaling fast enough now that the ROI math on entering seriously is shifting in real time.
The comparison worth sitting with is this: Walmart's marketplace is growing at roughly triple the rate of its overall US ecommerce business, which itself grew 23% globally. That's not a mature channel decelerating toward Amazon's growth rate. It's a channel still early enough in its scaling curve that sellers who establish real presence now, rather than waiting for it to look obviously necessary, get the advantage of building tenure and review history while competition is still thinner than it will be in two years.
What to Actually Do With This
If you're already on Walmart Marketplace but haven't moved meaningful volume into Walmart Fulfillment Services, this quarter's data suggests that's worth revisiting. Nearly half of all marketplace volume is now flowing through WFS, and that share is climbing, which means Walmart is actively building the infrastructure and, likely, the internal incentives to keep pushing sellers in that direction the same way Amazon has with FBA over the past decade.
If you're not on Walmart Marketplace at all, the honest read on this quarter is that the “too small to bother with” argument is getting weaker every quarter this growth rate holds. Run the numbers on your own catalog: a 52% marketplace growth rate against a 43% jump in Walmart Connect ad reach is a combination that, if it continues even at half this pace through next year, changes what “second marketplace” actually means for a brand that's spent years treating Amazon as the only channel that mattered.
