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Walmart Inc.’s (WMT) second-quarter fiscal 2026 results underscore how its ongoing digital transformation is reshaping the company’s growth profile. Global e-commerce sales jumped 25% in the quarter, while Walmart U.S. e-commerce grew 26%, contributing roughly 420 basis points to comparable sales and driving total revenues to $177.4 billion.
The strength came from continued improvements in delivery speed and marketplace expansion. Delivery from stores rose nearly 50%, with about one-third of orders fulfilled within three hours and roughly 20% arriving in under 30 minutes. These faster service times are helping build stronger repeat behavior and brand stickiness among omnichannel shoppers.
The financial impact of Walmart’s digital ecosystem is also evident. In the second quarter, the company’s advertising revenues surged 46% globally (including VIZIO), while Walmart Connect in the U.S. segment advanced about 31%. Membership income, led by Walmart+, also grew by double digits.
These higher-margin revenue streams helped support adjusted operating income, even as the company continued investing in fulfillment and technology. Adjusted EPS came in at 68 cents, up 1.5% year over year. Management noted that improved net delivery costs and mix shifts are starting to lift profitability.
With fulfillment now reaching nearly all U.S. households and marketplace participation expanding rapidly, Walmart’s digital flywheel is gaining strength. The question now is whether this expanding digital ecosystem can keep compounding and ultimately become the retailer’s strongest growth engine.
Kroger (KR) continues to scale its omnichannel capabilities, reporting 16% e-commerce sales growth in the second quarter of fiscal 2025, driven by strong delivery demand and improved profitability across both pickup and delivery channels. KR now offers two-hour delivery from 97% of its stores, leveraging its physical footprint for speed and efficiency. Kroger is also deepening its AI integration, using advanced tools for pricing, shrink reduction and personalized recommendations. These initiatives are aimed at boosting long-term digital profitability.
Target (TGT), meanwhile, emphasized technology as a pillar of its turnaround. In the second quarter of fiscal 2025, TGT’s digital comparable sales rose 4.3%, fueled by more than 25% growth in same-day delivery via Target Circle 360. Target deployed 10,000 new AI licenses to streamline forecasting and operations while improving online and in-store consistency.
Together, these bellwethers demonstrate how digital acceleration remains central to long-term growth in retail.
Shares of Walmart have risen 13.5% year to date compared with the industry’s growth of 13.3%.
From a valuation standpoint, WMT trades at a forward price-to-earnings ratio of 35.95, higher than the industry’s average of 32.81.
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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