Title: ๐Ÿ“Š PRO: This Week in Visuals โ€” WMT ADI NTES TGT AS KLAR Show: How They Make Money / App Economy Insights (Substack, Saturday PRO edition) Author: Bertrand (App Economy Insights) Date: 2026-08-22 (AUG 22, 2026) URL: https://www.appeconomyinsights.com/p/pro-this-week-in-visuals-6d5 Note: Written post โ€” no timestamps. PAID (PRO) post; body captured via Stephen's logged-in session. Verbatim body below (boilerplate trimmed). Today at a glance: ๐Ÿ›’ Walmart: Digital Outruns Stores โš™๏ธ Analog Devices: Grid-to-Chip Breakout ๐ŸŽฎ NetEase: Evergreen Games Deliver ๐ŸŽฏ Target: Traffic Holds Up โ›ท๏ธ Amer Sports: Wilson Joins In ๐Ÿ’ณ Klarna: GMV Reset 1. ๐Ÿ›’ Walmart: Digital Outruns Stores Walmart Q2 FY27 revenue rose 6% Y/Y to $187.9 billion ($1.1 billion beat), with adjusted EPS of $0.81 ($0.07 beat). Walmart US comps slowed to 2.6%, the weakest growth in more than six years and below the 3.7% consensus, sending shares sharply lower. Transactions still grew 1.5%. The headline slowdown is somewhat misleading. New federal drug-pricing rules created a roughly 125 bps drag on US comps. Excluding Health & Wellness, comps grew 3.4%. Walmart also used some of its tariff refunds to cut prices on more than 11,000 items. The company continues gaining share, particularly in grocery and among higher-income households. Meanwhile, the businesses increasingly driving Walmart's economics remain much stronger than store sales: - Global e-commerce grew 23%. - Advertising surged 38%. - Membership fee revenue increased 17%. Walmart US e-commerce has now grown above 20% for 10 consecutive quarters, with profitability improving as stores increasingly function as fulfillment hubs rather than simply physical retail locations. Fuel remains a challenge, with FY27 incremental fuel costs now expected above $2 billion. Walmart is also expected to continue reinvesting tariff refunds into lower prices, contributing to Q3 adjusted EPS guidance of $0.62โ€“$0.64, which is below consensus. Despite that reinvestment, Walmart raised FY27 sales growth guidance to 4%โ€“5% (from 3.5%โ€“4.5%) and adjusted operating income growth to 7%โ€“8.5% (from 6%โ€“8%). Bottom Line: Slower US comp reflects pharmacy pricing rather than lost share. The more important shift continues underneath, with e-commerce, advertising, membership, and marketplace growing far faster than traditional stores. Walmart increasingly looks less like a retailer with digital businesses attached and more like an omnichannel platform funded by retail. 2. โš™๏ธ Analog Devices: Grid-to-Chip Breakout Analog Devices Q3 revenue surged 40% Y/Y to $4.0 billion ($0.1 billion beat), with adjusted EPS up 68% to $3.45 ($0.11 beat). Adjusted operating margin reached 50%, while trailing-12-month free cash flow climbed to a record $4.9 billion. Data center now represents 80% of Communications revenue, up from more than 75% last quarter, with both ADI's optical and power businesses growing more than 100% Y/Y. Optical Circuit Switching revenue is expected to roughly double this year and again in 2027, while ADI's broader energy business has grown beyond $500 million. The $1.5 billion Empower Semiconductor acquisition also closed in July, extending ADI's power portfolio directly into the processor package. Management now describes its opportunity as spanning "grid to chip," addressing the increasingly difficult challenge of delivering power efficiently from the data center grid to AI accelerators. Demand strengthened throughout the quarter, and Q4 guidance moved higher again. Revenue is expected at roughly $4.3 billion versus $4.08 billion consensus, with adjusted EPS of about $3.86 versus $3.55 expected. Management also expects the momentum to carry into FY27. Bottom Line: Both optical and power accelerated beyond 100%. With Empower adding another layer to its power stack and AI infrastructure now becoming a meaningful structural business, ADI's growth story looks increasingly like an AI infrastructure cycle of its own. 3. ๐ŸŽฎ NetEase: Evergreen Games Deliver NetEase Q2 revenue rose 8% Y/Y to $4.4 billion ($30 million beat), while non-GAAP EPADS of $1.78 missed by $0.53, primarily due to investment losses rather than weaker operations. Gross margin expanded by 6pp Y/Y to 70%. Games and related services grew 10% to $3.7 billion, showing that NetEase did not need a major new launch to sustain momentum. Fantasy Westward Journey and Where Winds Meet remained key contributors, while Marvel Rivals returned to #2 on Steam's global top-seller chart following its summer content update. Eggy Party has now reached 700 million registered users with monthly active users consistently above 100 million. The live-service portfolio is still carrying the business. NetEase is therefore giving its pipeline more time. Management acknowledged that Sea of Remnants had a steeper-than-intended learning curve in early testing and is simplifying the opening experience rather than rushing the release. Ananta remains in development, with another update coming at Gamescom. AI is increasingly part of that development process. Management called it an "amplifier" for speeding content creation and improving player experiences, while NetEase's internal tools are being deployed across game development and UGC ecosystems. Outside gaming, Youdao returned to 4% growth, Cloud Music was roughly flat, and Innovative Businesses declined 4%. Bottom Line: Games accelerated to 10% growth while margins expanded, giving NetEase the luxury of polishing Sea of Remnants and Ananta. The next launches now look more like potential upside than something NetEase needs to sustain growth. 4. ๐ŸŽฏ Target: Traffic Holds Up Target Q2 revenue rose 5% Y/Y to $26.5 billion ($400 million beat), with comparable sales up 3.8%, driven almost entirely by a 3.6% increase in traffic. Adjusted EPS of $4.11 crushed estimates, although $1.65 came from tariff refunds. Excluding that benefit, EPS of roughly $2.46 still beat consensus. Target successfully lapped last year's Switch 2 launch while maintaining traffic growth, with sales increasing across all six merchandise categories. Hardlines grew more than 10%, while food, beauty, toys, and wellness remained strong. Apparel and home were roughly flat, however, showing that some of Target's historically important discretionary categories still need work. Margins were heavily distorted by $994 million of tariff refunds, which added roughly 370 bps to Q2 operating margin. But the underlying business improved too. Target now expects FY26 operating margin around 5.1% excluding refunds, roughly 50 bps above last year, even as it spends about $5 billion on stores, technology, and supply-chain improvements. Target raised FY26 sales growth guidance to approximately 5% (from 4%). Adjusted EPS is now expected at $9.90โ€“$10.90 including the tariff benefit; excluding it, the midpoint still increased by $0.75 from the prior outlook. Bottom Line: Q2 traffic remained strong even as recent tailwinds faded. The turnaround is gaining credibility, but home and apparel still need to participate before Target can claim a truly broad-based recovery. 5. โ›ท๏ธ Amer Sports: Wilson Joins In Amer Sports Q2 revenue surged 32% Y/Y to $1.63 billion ($90 million beat), with adjusted EPS of $0.22 more than doubling expectations. All three segments grew above 20% as Arc'teryx, Salomon Softgoods, and Wilson Tennis 360 increasingly operate as parallel growth engines. Amer raised FY26 revenue growth guidance again to approximately 24%, up from 20%โ€“22% previously. Outdoor Performance revenue grew another 37%, led by Salomon Softgoods, following 42% growth in Q1. Arc'teryx remained strong as well, with Technical Apparel up 32% and omni-comp sales rising 17%. Most notably, Ball & Racquet accelerated to 24% growth from 13% in Q1 as the Wilson Tennis 360 strategy gained traction. Profitability also improved materially, although the headline numbers need context. Adjusted operating margin jumped 730 bps to 12.8%, but 390 bps came from tariff refunds. Even excluding that windfall, group operating margin expanded more than three points. Ball & Racquet margin reached 17.2%, including a 970 bps tariff benefit, meaning its underlying margin still improved substantially after the Q1 compression. Inventory also grew just 19% against 32% revenue growth, a healthy trend. Amer now expects FY26 revenue growth of approximately 24% and operating margin of 14.2%โ€“14.5%. Outdoor Performance guidance was lifted to 27%โ€“28% growth, while Ball & Racquet is now expected to grow about 14%. Bottom Line: Salomon remains exceptionally strong, Arc'teryx continues compounding, and Wilson is now accelerating alongside them. More importantly, underlying margins expanded even after stripping out the tariff windfall. Amer is increasingly proving that its growth story is bigger than any single brand. 6. ๐Ÿ’ณ Klarna: GMV Reset Klarna Q2 revenue rose 27% Y/Y to $1.04 billion ($44 million beat), while GAAP EPS of $0.01 beat by $0.06. GMV increased 15% like-for-like to $36.6 billion, slowing sharply from 33% growth in Q1. But transaction margin dollars (revenue minus transaction costs) surged 42% to $446 million, while adjusted operating income more than tripled to $91 million. The economics are improving faster than volume. Revenue per active consumer rose 24%, helped by Fair Financing, the Klarna Card, and 2 million paying subscribers. Credit also improved: provisions fell to 0.52% of GMV (from 0.79% in Q1), while recent delinquency cohorts continued trending lower. US GMV grew 27%, and US transaction margin dollars more than doubled. Germany is the main weak spot. Klarna cut FY26 GMV guidance to $149โ€“$151 billion (from more than $155 billion) as discretionary spending softened in its largest market, while FX adds another headwind. Klarna still raised its transaction margin outlook, meaning it expects to earn more from a smaller volume base. Better product mix and credit performance are helping, although a new accounting treatment for Fair Financing also contributes to the increase. Q3 will look particularly soft, with just $5โ€“$15 million of adjusted operating income expected as Klarna front-loads spending ahead of major payment integrations and holiday launches. Management expects Q4 to be its strongest transaction-margin quarter. CFO Niclas Neglรฉn and CMO David Sandstrรถm will also step down in early 2027, adding uncertainty around the leadership transition. Bottom Line: The underlying economics moved in the right direction. Revenue grew faster than GMV, transaction margin grew faster than revenue, and credit losses improved. The next test is whether those stronger unit economics can survive a materially slower growth environment. Disclosure: I own NTES in App Economy Portfolio. I share my ratings (BUY, SELL, or HOLD) with App Economy Portfolio members.