Walmart, Footnotes, and Insight

If there’s one lesson about financial analysis that we harp upon constantly here at Calcbench, it’s that you should always read the footnote disclosures to understand what’s really going on within a company. 

Today we offer example No. 7,938,617 of why that’s true, courtesy of Walmart ($WMT). 

Walmart filed its latest earnings release on Thursday (for its fiscal Q2 2026, period ending July 30) and at first glance the numbers look fine: revenue up 4.76 percent from the year-earlier period, net income up an impressive 51.8 percent. Sounds great, right? 

Except, operating income was actually down 8.24 percent. So how did the retail giant go from that rather gloomy decline at the operational level to a delight pop in the bottom line? 

We started with the income statement summary on the Company-in-Detail page. There, we spied a one-time $2.71 billion gain in Walmart’s ‘Other (Gains) and Losses’ line-item. See Figure 1, below. (Since these numbers are typically subtracted from operating income, because they’re usually losses, a gain in this line item is portrayed as a negative number in parentheses.) 

If you then read Walmart’s actual earnings release via our Disclosures & Footnotes page, you’ll see that Walmart does report $0.88 EPS (as we see in Figure 1), but also an adjusted EPS of $0.68. 

So our next stop was to find Walmart’s reconciliation from that $0.68 adjusted EPS back to the $0.88 “standard” EPS. All companies reporting adjusted EPS numbers do include a reconciliation statement somewhere in their earnings release that explains the difference, but analysts often do need to sift through lots of disclosure before you find it. 

In our case, we found the EPS reconciliation on Page 34 of the earnings release, almost at the end. See Figure 2, below.

As you can see, Walmart booked a one-time $0.33 EPS gain, which also had a one-time $0.07 tax cost. Include a few other adjustments worth a few cents, and that’s how Walmart went from $0.88 EPS to $0.68 adjusted EPS — almost entirely due to that one-time gain. 

OK, cool, but exactly what was that gain? You had to read even further, to a tiny footnote appended to that $0.33 item. For those who prefer not to squint, it says the gain was primarily driven by a surge in the stock price of Symbotic ($SYM), a robotics company in suburban Boston that makes warehouse automation equipment. Walmart owns a minority stake in the business, whose share price went from $28 in late May to nearly $63 earlier this month. 

For the record, Walmart’s adjusted EPS for the prior quarter was $0.61, which means its adjusted EPS of $0.68 now is still an increase of 11.4 percent, which ain’t nothing — but it’s nowhere near the 57.1 percent jump in standard EPS, either. The pillars of Walmart’s operating business were under stress, as seen in that drop in operating profit. 

We don’t know what all this portends for Walmart’s future (the company remained confident that it will hit its full-year guidance for fiscal 2026), but you'd need transparency into the footnotes to perceive the uncertainty that’s there. 

Otherwise you might be led down the primrose lane of net income, which oftentimes isn’t the full story.