Walmart Q4 Earnings Top Estimates on E-commerce and Ad Growth

Walmart Inc. WMT reported fourth-quarter fiscal 2026 results, wherein both top and bottom lines exceeded the respective Zacks Consensus Estimate. Growth was supported by sustained e-commerce momentum, advertising expansion, membership income gains and operating leverage. Management also introduced fiscal 2027 guidance and approved a new share repurchase authorization.

Walmart’s Quarterly Metrics: Key Insights

Adjusted earnings were 74 cents per share, up 12.1% from the year-ago period’s 66 cents. The bottom line surpassed the Zacks Consensus Estimate by a penny. 

Total revenues increased 5.6% year over year to $190.7 billion, outpacing the consensus estimate of nearly $190.1 billion. On a constant-currency basis, revenues rose 4.9%, driven by strength across all units. 

Global e-commerce sales advanced 24%, representing 23% of total net sales. Growth was driven by store-fulfilled pickup and delivery and marketplace expansion. The global advertising business rose 37% in the quarter, including VIZIO, while Walmart Connect in the United States increased 41%. Global membership fee revenues grew 15.1%.

The consolidated gross profit rate expanded 13 basis points to 24%, fueled by Walmart U.S. performance and a better business mix, partly negated by a merchandise category mix. The adjusted operating expense rate improved 19 basis points to 20.3% of net sales. Adjusted operating income increased 10.5% on a constant-currency basis.

Decoding Walmart’s Segmental Show

Walmart U.S.: Net sales rose 4.6% year over year to $129.2 billion. Comparable sales, excluding fuel, increased 4.6%. Gains were driven by a 2.6% rise in transactions and a 2% increase in the average ticket, indicating balanced growth across traffic and basket size. E-commerce contributed approximately 520 basis points to comp growth, reflecting strong digital engagement.

E-commerce sales jumped 27%, supported by store-fulfilled pickup and delivery and marketplace activity. Expedited store-fulfilled delivery sales advanced more than 50%, and e-commerce mix reached a record 23% of segment sales. Advertising growth remained robust, with Walmart Connect revenues up 41% (excluding VIZIO).

Gross profit increased 5.3% to $34.8 billion, with the gross margin rate improving 17 basis points to 26.9%. Operating income advanced 6.6% to $7 billion, growing faster than sales due to gross margin expansion and operating leverage. 

Walmart International: Net sales increased 11.5% to $35.9 billion. On a constant-currency basis, sales rose 7.5%, led by China, Walmex and Flipkart. Currency fluctuations positively affected reported sales by approximately $1.3 billion. E-commerce sales grew 17% in the quarter, with rising digital penetration across markets. Strength was broad-based across categories and geographies, supported by higher transaction counts and unit volumes. Membership and other income increased 16.3%, reflecting strong membership fee growth of 31%.

Gross profit climbed 12.3% to $7.8 billion, with the gross margin rate expanding 14 basis points to 21.8%. On a constant-currency basis, adjusted operating income increased 26.5% to $1.8 billion, driven by lower e-commerce losses, lapping prior-year strategic investments and an improved business mix. The timing shift of Flipkart’s Big Billion Days event modestly weighed on reported quarterly growth comparisons.

Sam’s Club U.S.: Net sales rose 2.9% to $23.8 billion, while net sales, excluding fuel, increased 4.0%. Comparable sales, excluding fuel, grew 4%, supported by a 5.3% increase in transactions despite a 1.3% decline in the average ticket, reflecting mix and pricing dynamics. E-commerce sales advanced 23%, with continued strength in club-fulfilled pickup and delivery. E-commerce now represents 19% of net sales (excluding fuel), contributing approximately 380 basis points to comp growth. Membership fee revenues increased 6.1%, supported by growth in member counts, renewal rates and Plus memberships.

Gross profit increased 1.4% to $2.7 billion, though the gross margin rate declined 16 basis points to 11.2%, primarily due to the channel and format mix. Operating income rose 3.8% to $596 million, reflecting expense leverage and steady membership growth.

WMT’s Financial Position & Capital Allocation

Walmart ended fiscal 2026 with cash and cash equivalents of $10.7 billion and total debt of $51.5 billion. For the full year, operating cash flow amounted to $41.6 billion, while free cash flow was $14.9 billion.

During fiscal 2026, the company repurchased 85 million shares for $8.1 billion and raised its annual dividend to 99 cents per share. Management also authorized a new $30 billion share repurchase program, replacing the prior authorization.

What to Expect From Walmart in FY27?

For the first quarter of fiscal 2027, Walmart expects net sales growth of 3.5-4.5% (cc), operating income growth of 4-6% (cc) and adjusted EPS of 63-65 cents.

For fiscal 2027, the company projects net sales growth of 3.5-4.5% (cc) and adjusted operating income growth of 6-8% (cc). Adjusted EPS is expected in the range of $2.75-$2.85 compared with the adjusted EPS of $2.64 delivered in fiscal 2026.

Shares of this Zacks Rank #3 (Hold) company have gained 17.6% in the past three months compared with the industry’s growth of 19.7%.

Key Picks

Ollie's Bargain Outlet Holdings, Inc. OLLI operates as a retailer of closeout merchandise and excess inventory in the United States and currently carries a Zacks Rank #2 (Buy). OLLI delivered a trailing four-quarter earnings surprise of 5.2%, on average. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for Ollie's current fiscal-year sales and earnings implies growth of 16.7% and 17.7%, respectively, from the year-ago reported numbers.

BJ's Wholesale Club BJ operates membership warehouse clubs and carries a Zacks Rank #2 at present. BJ delivered a trailing four-quarter earnings surprise of 10.3%, on average.

The Zacks Consensus Estimate for BJ's Wholesale’s current fiscal-year sales and earnings indicate growth of 4.3% and 7.7%, respectively, from the year-ago reported numbers.

Dillard's, Inc. DDS operates retail department stores and currently carries a Zacks Rank #2. DDS delivered a trailing four-quarter earnings surprise of 26.5%, on average.

The Zacks Consensus Estimate for Dillard's current fiscal-year sales indicates growth of 1.1% from the year-ago period’s reported number.

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

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