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Walmart Earnings: eCommerce Surge, Market Share Gains, and Raised FY26 Outlook

A blue digital-themed illustration featuring the yellow Walmart spark logo in the upper left, with circuit-like lines extending across the background and white delivery vans moving to the right surrounded by motion arrows, symbolizing Walmart’s rapid eCommerce and fulfillment acceleration.

TLDR


• Revenue Strength: Q3 sales +6% constant currency, powered by 27% eCommerce growth and broad-based share gains.

• Margin Trends: Adjusted operating income +8% with strong advertising, membership, and improved eCommerce economics.

• Forward Outlook: Management raises FY26 revenue and operating income guidance; consumer trends remain stable.


Business Overview


Walmart Inc. is the world’s largest omnichannel retailer, serving over 270 million weekly customers through:

  • Walmart U.S. — National supercenters, neighborhood markets, and a rapidly scaling eCommerce and omnichannel fulfillment network.

  • Walmart International — Operations in 19 countries including Canada, Mexico, India (Flipkart, PhonePe), and China.

  • Sam’s Club U.S. — Membership warehouse club with accelerating digital adoption.


Walmart’s platform includes more than 500 million marketplace SKUs, a global advertising network (Walmart Connect + Flipkart Ads + VIZIO), and one of the most advanced supply chain automation programs in retail.


Walmart Earnings


Revenue

  • Total revenue: +5.8% reported; +6.0% constant currency

  • Drivers:

    • +27% global eCommerce growth

    • Strength in marketplace, advertising, and faster fulfillment

    • Membership income +17%

    • International growth +11.4% constant currency

“Sales grew 5.9% overall in constant currency, and adjusted operating income grew even faster at 8%. We’re gaining market share across income cohorts.” — Doug McMillon, Ceo

Margins & Profitability

  • Gross margin: +2 bps

  • Adjusted operating income: +8% constant currency

  • GAAP operating income: pressured by ~$700M non-cash PhonePe share-based compensation charge

  • Adjusted EPS: $0.62 (+7% YoY)


Cash Flow & Balance Sheet

  • Operating cash flow: +$27B YTD

  • Free cash flow: +$8.8B

  • Inventory: +3% YoY; Walmart U.S. +2.6% despite tariff pressure

  • Strong liquidity to fund automation, remodels, and marketplace expansion


Forward Guidance (revised FY26)


Walmart raised full-year guidance:

  • Net sales growth (constant currency): 4.8–5.1% (prior 3.75–4.75%)

  • Adjusted operating income growth: 4.8–5.5%

  • Adjusted EPS: $2.58–$2.63

  • Q4 sales: 3.75–4.75% constant currency

  • FX: Expected $1.1B tailwind to Q4 reported revenue

“Despite 150bps of headwinds from VIZIO, leap year, and higher claims expense, we still expect to grow operating income faster than sales.” — CFO John David Rainey

Risks & Opportunities


Risks:

  • Maximum fair pricing impact on January pharmacy comps

  • Category mix headwinds from health & wellness

  • Persistent beef inflation; possible egg deflation

  • Global trade and tariff sensitivity


Opportunities:

  • Marketplace SKU expansion

  • Advertising (+53% globally)

  • High-velocity delivery (<3 hours for 35% of orders)

  • Automation lowering cost-to-serve

  • International strength (China, India, Mexico)


Operational Performance


Walmart U.S.

  • Comp sales: +4.5%

  • eCommerce: +28% (seventh consecutive >20% quarter)

  • Delivery: 35% of orders delivered in under 3 hours

  • Category performance:

    • Apparel: +5% units every month

    • GM positive with fashion, home, auto leading

    • Grocery low-single-digit growth; strong unit share

    • Health & wellness: low double-digit revenue


Inventory discipline remains a strategic strength, enabling lower markdown risk and attractive holiday value.


Walmart International

  • Sales: +11.4% constant currency

  • eCommerce: +26%

  • Flipkart Big Billion Days:

    • 87 orders per second

    • Record sales; lower eCommerce losses

  • China: 22% growth; 80% of digital orders delivered in <1 hour


Sam’s Club U.S.

  • Comp sales: +3.8% ex fuel (lapping +120 bps port-strike benefit last year)

  • eCommerce: +22%

  • Scan & Go penetration: 36%

  • Plus Member penetration and net adds at record highs

  • Delivery orders: triple-digit growth for the fourth straight quarter


Market Insights


Category Dynamics


  • General Merchandise: Rebounding with strong innovation; discretionary recovery visible in apparel, toys, seasonal

  • Grocery: Unit share outpacing dollar share

  • Fresh: Strong volume; benefiting from lower waste and better in-stocks

  • Health & Wellness: Structurally stronger segment; will temporarily decelerate due to new pricing legislation


Competitive Landscape


Walmart is widening price gaps through 7,400 active rollbacks — half in grocery — and using marketplace assortment (+40% YoY growth in auto, toys, apparel categories) to broaden appeal across all income levels.


Consumer Behavior & Sentiment


1. Consistent overall spending

  • “Quarter was quite consistent month to month.” — CFO

  • Holiday off to a “good start.”


2. High-income households are accelerating

Higher-income consumers drove meaningful share gains — especially in fashion and GM.


3. Middle-income stable, low-income moderating

Lower-income shoppers showing modest pressure, consistent with wage growth divergence.


4. Delivery adoption is universal

All income cohorts increasingly choosing faster delivery (<3 hours), signaling rising demand for time savings.


5. Elasticity varies by category

Electronics, toys, seasonal show higher AUR elasticity; grocery more stable due to Walmart’s EDLP strategy.


Strategic Initiatives


AI & Agentic Commerce


“We’re building toward an eCommerce experience that’s more personalized, multimodal, and contextual… helping customers save time.” — Doug McMillon

Key developments:

  • Sparky, Walmart’s digital agent, now live in the app

  • AI-powered catalog accuracy and gap detection

  • 40% of new code is AI-generated or assisted

  • Trials of auto-generated baskets (Chile) driving 20% of eCommerce sales

  • Partnership with OpenAI—shop directly in ChatGPT


Automation & Supply Chain

  • 50% of FC volume automated

  • 60% of stores receiving automated DC freight

  • Shipping costs down double digits

  • Rising unit productivity → improving eCommerce margin profile


Omnichannel Expansion

  • Expedited delivery growing nearly +70%

  • Marketplace SKU quality improvements through AI insights

  • Sam’s Club leveraging Walmart enterprise tech stack


International Growth Engine

  • India, China, Mexico acting as high-growth nodes

  • Sam’s Club China: membership income +34%



Capital Allocation


  • Dividends: Nearly $13B YTD dividends + repurchases

  • Buybacks: $5.1B remaining authorization

  • Capex: Focus on automation, remodels (7-year cycle), marketplace, and technology

  • ROI Discipline: Management reiterated alignment to “ROI rising every year” despite higher capex


The Bottom Line



1. The Consumer Is Stable and Walmart Is Winning Across Income Cohorts: Upper-income momentum offsets low-income moderation; share gains across grocery, GM, and eCommerce.


2. Profit Mix Is Improving Faster Than Sales: Advertising +53%, membership +17%, eCommerce economics improving, and automation reducing shipping cost.


3. AI and Automation Are Becoming Core Margin Engines: Sparky, multimodal experiences, auto-generated baskets, and accelerated digital adoption position Walmart as a future-forward retailer.


Walmart enters Q4 with strong momentum, healthy inventory, and a raised full-year outlook — signaling that the retailer’s competitive position is strengthening, not just holding.



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