Grocery and Health Strength Lift Walmart's US Sales: Will It Last?

Walmart Inc.’s (WMT) U.S. segment delivered a 4.6% increase in comp sales in the second quarter of fiscal 2026, underscoring steady consumer engagement in essential categories. Net sales for the segment reached $120.9 billion, up 4.8% from the prior year, as both transactions and average ticket contributed to growth. This reflects consumers maintaining spending on core household needs while responding favorably to Walmart’s continued pricing rollbacks and value messaging.

Grocery remained the primary growth engine, posting mid-single digit gains with strength across fresh, pantry and dairy. Health and wellness accelerated at a mid-teens rate, fueled by increased pharmacy script counts, higher branded drug mix, and growth in optical and over-the-counter products. These essential categories more than offset ongoing general merchandise softness, where sales rose in the low single digits but faced some deflationary pressure.

Digital engagement provided an additional boost. Walmart U.S. e-commerce sales advanced 26% year over year, contributing about 420 basis points to comp sales performance. Nearly half of online orders were fulfilled from stores, with delivery volumes rising close to 50%. Roughly one-third of store deliveries were completed within three hours, a speed advantage that continues to differentiate Walmart’s omnichannel model. Advertising momentum on the Walmart Connect platform further supported digital sales productivity.

Operational execution also helped sustain growth quality. Inventory in the U.S. segment rose 2.2% and maintained healthy in-stock levels, aided by improved flow and mix management. Overall, the 4.6% comp sales performance was concentrated in high-frequency categories where pricing actions, expanded convenience and faster fulfillment combined to drive both transactions and unit volumes, reinforcing Walmart’s strong positioning in day-to-day essentials.

Kroger and Costco Extend Gains in Core Essentials

Kroger (KR) saw grocery and health lift results, with identical sales without fuel up 3.4% in the second quarter of fiscal 2025, and total company sales, excluding fuel and Kroger Specialty Pharmacy, up 3.8%. Kroger highlighted pharmacy, e-commerce and fresh as the principal drivers, with e-commerce growth contributing to broader comp resilience. KR’s execution in fresh and pharmacy mirrors the category patterns, lifting Costco and Walmart.

Costco (COST) continues to show robust comp momentum with fourth-quarter fiscal 2025 net sales of $84.4 billion and comparable sales up 5.7%, driven by grocery and fresh. COST’s fresh category posted high single-digit growth, and meat saw double-digit gains. Costco’s pharmacy and ancillary services also supported comp strength, and its e-commerce comps advanced materially in the quarter. The company’s focus on value and perishables underpins steady traffic and basket growth.

WMT’s Stock Price Performance, Valuation & Estimates

Shares of Walmart have soared 12.4% year to date compared with the industry’s growth of 11.7%.

WMT Price Performance Versus Industry

From a valuation standpoint, WMT trades at a forward price-to-earnings ratio of 35.66, higher than the industry’s average of 32.41.

WMT Valuation Compared to Industry

The Zacks Consensus Estimate for WMT’s fiscal 2026 and 2027 earnings implies year-over-year growth of 3.6% and 12.5%, respectively.

Walmart currently carries a Zacks Rank #2 (Buy). 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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