Walmart Lifts FY26 Outlook on Q3 Earnings & Revenue Beat

Walmart Inc. WMT raised its fiscal 2026 guidance once again after posting robust third-quarter results. During the quarter, both the top and bottom lines increased year over year and beat the Zacks Consensus Estimate. E-commerce remained a standout performer, with WMT witnessing market share gains, improved delivery speed and efficient inventory management.

Walmart’s Quarterly Metrics: Key Insights

WMT’s adjusted earnings of 62 cents per share increased 6.9% year over year. The metric surpassed the Zacks Consensus Estimate by a penny.

Walmart’s total revenues rose 5.8% year over year to $179.5 billion, beating the consensus mark of $177.14 billion. On a constant-currency or cc basis, revenues grew 6%.

Walmart’s global e-commerce sales rose 27% thanks to store-fulfilled pickup & delivery and marketplace. The company witnessed more than 20% growth in all segments. It saw a 16.7% increase in membership income. WMT’s global advertising business advanced 53%.

The consolidated gross profit margin expanded two bps to 24.2%, driven by Walmart U.S., somewhat negated by the International segment.

Adjusted operating expenses leveraged four bps, supported by strict expense management. Adjusted operating income came in at $7.2 billion, up 8% at cc.

Decoding Walmart’s Segmental Show

Walmart U.S.: The segment’s net sales grew 5.1% year over year to $120.7 billion. Strong sales performance was driven by e-commerce strength and share growth in all categories. U.S. comp sales, excluding fuel, were up 4.5%, fueled by transaction growth of 1.8%, an average ticket increase of 2.7%, and e-commerce contribution of 440 basis points. E-commerce sales rose 28%, driven by store-fulfilled delivery, advertising and marketplace strength. Segment operating income jumped 6.3% to $5.8 billion.

Walmart International: The segment’s net sales inched up 10.8% to $33.5 billion. Foreign currency fluctuations adversely impacted sales by $0.2 billion. On a cc basis, net sales jumped 11.4%, driven by strong performance in China, Flipkart and Walmex, supported by higher transaction counts and increased unit volumes. 

Sales were driven by both stores and e-commerce, with solid momentum in all categories. E-commerce sales increased 26%, driven by strong growth in store-fulfilled pickup and delivery services and marketplace performance, with a higher digital sales mix across markets. Adjusted operating income, on a cc basis, jumped 16.9% to $1.4 billion.

Sam’s Club U.S.: The segment, which comprises membership warehouse clubs, witnessed a net sales increase of 4.4% to $21.1 billion (excluding fuel). Sam’s Club’s comp sales, excluding fuel, grew 3.8%. While transactions rose 3.9%, the average ticket dipped 0.1%. Sales growth was driven by strong performance in grocery and general merchandise.

E-commerce net sales jumped 22% at Sam’s Club U.S., thanks to strength in club-fulfilled pickup & delivery. Membership income increased 7.1%, supported by consistent growth in member count, strong renewal rates and Plus members. The segment’s operating income totaled $0.7 billion, up 5.8% year over year.

WMT Stock: Other Updates & Developments

The Zacks Rank #3 (Hold) company ended the quarter with cash and cash equivalents of $10.6 billion and total debt of $53.1 billion.

On a year-to-date basis, WMT generated an operating cash flow of $27.5 billion and a free cash flow of $8.8 billion. In fiscal 2026, capital expenditure is likely to account for 3-3.5% of net sales.

Year to date, Walmart repurchased 75.3 million shares for $7 billion, with $5.1 billion remaining under its $20 billion authorization. The company paid dividends worth $5.7 billion in the same time frame.

What to Expect From WMT in FY26?

For fiscal 2026, WMT now expects consolidated net sales growth of 4.8-5.1% (at cc) compared with prior guidance of 3.75-4.75%. The adjusted operating income is expected to increase 4.8-5.5% at cc for the year.

Walmart now expects adjusted EPS for fiscal 2026 to be in the $2.58-$2.63 range compared with prior guidance of $2.52-$2.62. The guidance includes an expected impact of 1-2 cents from adverse currency fluctuations. WMT recorded an adjusted EPS of $2.51 in fiscal 2025.

WMT’s shares have gained 2.7% in the past three months compared with the industry’s growth of 2.2%.

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