Walmart's Membership Income Jumps 15%: Is Loyalty the Moat?

Walmart Inc.’s WMT latest financial results highlight a key metric beyond traditional retail measures. The growth in membership income, a key indicator of customer loyalty, presents a compelling narrative. During the second quarter of fiscal 2026, global membership fee income surged 15.3%, indicating the success of the Walmart+ program. This robust increase contributed to the overall 5.4% growth in the "Membership and other income" segment.

Membership fees, spanning Walmart+ and Sam’s Club, grew well ahead of overall sales, reflecting strong customer engagement and renewal momentum. In the United States, Walmart+ delivered double-digit growth in fee income, while Sam’s Club posted a 7.6% rise fueled by higher Plus member penetration and consistent renewal strength.

Management highlighted that membership economics has become an important driver alongside advertising and e-commerce. CFO John David Rainey noted that the financial flexibility from these higher-margin streams is helping Walmart offset cost headwinds while supporting price leadership and market share gains. The company also tied its membership growth to initiatives like faster delivery, driving higher customer loyalty and repeat purchases.

Walmart’s new offerings, like the OnePay Cash Rewards credit card with 5% cash back for Walmart+ members, are designed to boost customer engagement and spending. As renewal rates climb and services expand, Walmart+ is shifting from being just a subscription service to becoming a key driver of customer loyalty. The growth in membership fees shows it’s now a vital part of Walmart’s future strategy.

What the Latest Metrics Say About Walmart

Walmart, which competes with Costco Wholesale Corporation COST and Target Corporation TGT, has been a standout performer, with shares rallying 28.9% in the past year compared with the industry’s growth of 26.9%. Shares of Costco have advanced 5.6%, while Target declined 42% in the aforementioned period.
 

From a valuation standpoint, Walmart's forward 12-month price-to-earnings ratio stands at 37.01, higher than the industry’s 33.31. WMT carries a Value Score of C. Walmart is trading at a premium to Target (with a forward 12-month P/E ratio of 11.39) but at a discount to Costco (48.59). 
 

The Zacks Consensus Estimate for Walmart’s current financial-year sales and earnings per share implies year-over-year growth of 4% and 3.6%, respectively. 
 

Walmart 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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