Walmart eCommerce and Advertising Growth Drive a More Scalable Model

Walmart Inc. has released its third-quarter financial results, showcasing impressive gains in revenue and adjusted earnings per share (EPS). The company not only exceeded market expectations but also provided optimistic guidance for the upcoming fiscal year.

Q3 Revenue and EPS Beat Driven by Strong U.S. and Ecommerce Performance

In the third quarter, Walmart reported a revenue of $179.5 billion, marking a 5.8% increase from the previous year, and a 6.0% rise in constant currency terms. This figure surpasses the anticipated revenue of $177.45 billion, reflecting the company’s robust performance across various segments. The adjusted earnings per share (EPS) stood at $0.62, slightly above the expected $0.60, indicating a successful quarter for the retail giant. The company’s eCommerce segment was a significant contributor to this success, with a 27% growth globally, showcasing strong market share gains and improved delivery speed.

Walmart’s U.S. comparable sales increased by 4.5%, driven by strength in grocery, health and wellness, and general merchandise categories. The company managed to grow its operating income by 6.3% in the U.S. despite a slight overall decrease of 0.2% in operating income, primarily due to a non-cash share-based compensation charge at PhonePe. However, when adjusted for constant currency, operating income reflected an 8.0% increase, highlighting the company’s effective inventory management and improved eCommerce economics.

Globally, Walmart’s advertising business grew by 53%, with Walmart Connect in the U.S. experiencing a 33% increase. Membership and other income also saw a rise of 9.0%, further contributing to the company’s positive financial performance. Despite the challenges posed by the timing of Flipkart’s Big Billion Days event, which affected international operating income, the company demonstrated resilience in maintaining a strong gross margin rate and managing inventory levels effectively.

Walmart Raises FY26 Outlook as Strategic Investments Drive Confidence

Looking ahead, Walmart has raised its outlook for fiscal year 2026, reflecting confidence in its strategic initiatives and market positioning. The company now expects net sales growth in the range of 4.8% to 5.1%, with adjusted operating income projected to increase by 4.8% to 5.5%, both in constant currency terms. This optimistic guidance is supported by the company’s continued focus on enhancing its eCommerce capabilities and expanding its global footprint.

The adjusted EPS for fiscal year 2026 is anticipated to be between $2.58 and $2.63, factoring in a minor currency headwind of $0.01 to $0.02. This forecast underscores Walmart’s commitment to delivering value to its shareholders and maintaining its competitive edge in the retail sector. The company’s strategic investments in technology and infrastructure are expected to play a pivotal role in achieving these targets.

Walmart’s forward-looking statements, however, do come with inherent uncertainties, including fluctuations in foreign currency exchange rates, global economic conditions, and potential geopolitical tensions. Despite these challenges, the company remains focused on executing its growth strategy and leveraging its strengths in eCommerce and supply chain management to drive sustainable long-term growth.

As Walmart continues to navigate the evolving retail landscape, it remains well-positioned to capitalize on emerging opportunities and deliver consistent value to customers and shareholders alike. The company’s strategic initiatives and strong financial performance in the third quarter provide a solid foundation for future success.

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