How Walmart is Positioning for Comp Growth Amid Consumer Shifts?

Walmart Inc. WMT is refining its strategy to align with rapidly shifting consumer behaviors. In the first quarter fiscal 2026, Walmart U.S. delivered comp growth of 4.5% driven by transaction improvement of 1.6% and an average ticket increase of 2.8%, as well as strong e-commerce growth. Complementing this performance, Sam’s Club U.S. posted a robust 6.7% increase in comparable sales, excluding fuel. The growth was primarily volume-driven, with strength in Member’s Mark products.

A major driver of this traffic momentum is Walmart’s expansion of store-fulfilled delivery, now reaching 93% of U.S. households with delivery in under three hours. In the fiscal first quarter, one-third of Walmart’s deliveries were expedited, underscoring the increasing role of convenience in driving customer visits.

Membership remains another key growth lever. Walmart+ membership income rose at a double-digit rate. The company’s health and wellness category surged with high-teens growth, supported by strong prescription volume and over-the-counter product sales. To reinforce its price leadership, Walmart implemented more than 5,000 price reductions during the quarter.

Walmart’s strategy reflects a retail model that integrates stores, digital convenience and membership-driven engagement. By prioritizing faster fulfillment, competitive pricing and a broader customer reach, Walmart is positioning itself to drive steady same-store sales growth while adapting to evolving consumer demands in a highly competitive retail landscape.

Walmart’s Comp Growth Compared With Target and Costco

Target Corporation TGT reported a 3.8% decline in comparable sales for the first quarter of fiscal 2025, driven by weaker discretionary demand. However, Target continues to prioritize same-day services, with Drive Up accounting for nearly half of digital sales in the quarter. Target expanded the Target Plus marketplace, growing GMV more than 20%, aiming to enhance assortment and offset comp pressures.

In contrast, Costco Wholesale Corporation COST reported 5.7% total company comparable sales growth in the third quarter of fiscal 2025, with U.S. comparable sales up 6.6%. Costco benefited from strong traffic and private label gains via Kirkland Signature. In addition, Costco is using local sourcing and strategic inventory management to maintain volume-driven comparable sales growth despite inflationary and tariff headwinds.

WMT’s Price Performance, Valuation and Estimates

Shares of Walmart have gained around 0.4% in the past three months compared with the industry’s growth of 0.3%.

From a valuation standpoint, WMT trades at a forward price-to-earnings ratio of 34.74X, significantly up from the industry’s average of 31.99X.

The Zacks Consensus Estimate for WMT’s fiscal 2026 earnings implies year-over-year growth of 3.6%, whereas the same for fiscal 2027 indicates a year-over-year uptick of 11.7%.

WMT currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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