Company Reports

Walmart is the largest retailer in the world, a byproduct of its standing as the low-price leader, generating more than $700 billion in annual revenue. The firm doesn’t just have a physical store network but also has a digitally enabled ecosystem centered on grocery, fulfillment, advertising, and membership. While its roughly two-thirds share of the superstore and warehouse club market reflects a dominant position that should hold, we posit Walmart’s leading 31% online grocery share and 20% digital penetration underscore the effective conversion of its store scale into digital traction.

Walmart's fiscal 2027 second quarter included US comparable sales growth of 2.6% on traffic and ticket growth of 1.5% and 1.1%, respectively. Adjusted operating income grew 10%, when excluding a 7% boost from tariff refunds. Shares sank 9% on Aug. 20 after the results.

Walmart is the largest retailer in the world, a byproduct of its standing as the low-price leader, generating more than $700 billion in annual revenue. The firm doesn’t just have a physical store network but also a digitally enabled ecosystem centered on grocery, fulfillment, advertising, and membership. While its roughly two-thirds share of the superstore and warehouse club market reflects a dominant position that should hold, we posit Walmart’s leading 31% online grocery share and 20% digital penetration underscore the effective conversion of its store scale into digital traction.

Walmart has agreed to acquire Vibe.co, a self-serve connected-TV, or CTV, advertising platform for small businesses and midmarket advertisers for a reported $1.4 billion. The deal is expected to close by fiscal year-end and has no impact on fiscal 2027 sales or profitability guidance.

Walmart's first-quarter results included 7.3% net sales growth and adjusted EPS of $0.66 (up 8.1%). Adjusted operating income grew 5%, navigating an incremental $175 million fuel cost hit, while global e-commerce and advertising revenue surged 26% and 37%, respectively.

Walmart is the largest retailer in the world, a byproduct of its standing as the low-price leader, generating more than $700 billion in annual sales. The firm doesn’t just have a physical store network but also a digitally enabled ecosystem centered on grocery, fulfillment, advertising, and membership. While its roughly two-thirds share of the superstore and warehouse club market reflects a dominant position that should hold, we posit Walmart’s leading 31% online grocery share and 20% digital penetration underscore the effective conversion of its store scale into digital traction.

Walmart's fourth-quarter results included 5.6% net sales growth and adjusted EPS of $0.74. The firm continues to benefit from widespread demand across income cohorts, while strength in digital and memberships helped lift gross margin by 10 basis points to 24.7%.

Walmart is the largest retailer in the world, a byproduct of its standing as the low-price leader, generating more than $680 billion in annual sales. The firm doesn’t just have a physical store network but also a digitally enabled ecosystem centered on grocery, fulfillment, advertising, and membership. While its 67% share of the superstore and warehouse club market reflects a dominant position that should hold, we posit Walmart’s leading 32% online grocery share and 18% digital penetration underscore the effective conversion of its store scale into digital traction.

Walmart's third-quarter results included 5.8% net sales growth and adjusted earnings per share of $0.62. The firm continues to benefit from broad-based demand across income cohorts, while strength in digital and memberships helped lift gross margins up 19 basis points to almost 28% for Walmart US.

Walmart announced that CEO Doug McMillon will pass the torch to current Walmart US CEO John Furner on Feb. 1, 2026. McMillon will stay on the board until June 2026 and remain as advisor to Furner through January 2027.

Competition abounds, but Walmart's position as the world's largest retailer is unwavering. The firm boasts a vast store network, which it has complemented in recent years by investing in a digitally-enabled ecosystem that now accounts for 18% of sales compared with just 5% in fiscal 2019.

Walmart is the largest retailer in the world, a byproduct of its standing as the low-price leader, generating more than $680 billion in annual revenue. The firm doesn’t just have a physical store network but also a digitally enabled ecosystem centered on grocery, fulfillment, advertising, and membership. While its 67% share of the superstore and warehouse club market reflects a dominant position that should hold, we posit Walmart’s leading 32% online grocery share and 18% digital penetration underscore the effective conversion of its store scale into digital traction.

Walmart's fiscal 2026 second-quarter sales were up 4.6% in its US stores on a comparable basis, reflecting a 1.5% benefit from transactions and a 3.1% increase in average ticket. Gross margin expanded just 4 basis points to 24.5%.

Wide-moat Walmart’s unrivaled scale relative to its brick-and-mortar retail peers allows the firm to formidably adapt to a dynamic retail landscape. Walmart benefits from an expansive physical footprint and entrenched position in the communities it serves, putting the retailer near the vast majority of US consumers. And the firm’s wide assortment of goods at low prices has allowed Walmart to maintain its status as a leading domestic retailer for over 30 years.

Wide-moat Walmart’s unrivaled scale relative to its brick-and-mortar retail peers allows the firm to formidably adapt to a dynamic retail landscape. Walmart benefits from an expansive physical footprint and entrenched position in the communities it serves, putting the retailer in close proximity to the vast majority of US consumers. And the firm’s wide assortment of goods at low prices has allowed Walmart to maintain its status as a leading domestic retailer for over 30 years.

Walmart's top line increased by 2.5% in the first quarter (4% in constant currency), led by comparable sales growth of 4.5% at its domestic stores and 6.7% at Sam's Club. Adjusted EPS of $0.61 improved $0.01 from last year.

Wide-moat Walmart’s unrivaled scale relative to its brick-and-mortar retail peers allows the firm to formidably adapt to a dynamic retail landscape. Walmart benefits from an expansive physical footprint and entrenched position in the communities it serves, putting the retailer in close proximity to the vast majority of US consumers. And the firm’s wide assortment of goods at low prices has allowed Walmart to maintain its status as a leading domestic retailer for over 30 years.

We plan to modestly raise our $58 per share fair value estimate on wide-moat Walmart following its strong fiscal 2025 fourth-quarter earnings, as we expect the firm to increase profits faster than sales for the foreseeable future. Results closely aligned with our forecast, as the retailer's low prices and convenient omnichannel offerings translated into continued share gains in its domestic market. Double-digit growth in high-margin profit streams such as advertising and membership income helped drive a robust 10% increase in adjusted earnings per share to $0.66 (slightly below our $0.68 estimate). Despite Walmart's continued outperformance relative to the retail industry, investors pushed shares down about 6% during intraday trading on Feb. 20. We surmise that underwhelming guidance for fiscal 2026 was the primary culprit for the selloff, as management expects EPS to land in a range of $2.50-$2.60 next year, landing below our $2.76 estimate. We remain optimistic about Walmart's ability to increase market share and expand margins longer term (we forecast a midcycle operating margin of about 5.5%, up from 4.4% in fiscal 2025) but continue to view shares, trading around 38 times next year's expected earnings, as overvalued.

Wide-moat Walmart’s unrivaled scale relative to its brick-and-mortar retail peers allows the firm to formidably adapt to a dynamic retail landscape. Walmart benefits from an expansive physical footprint and entrenched position in the communities it serves, putting the retailer in close proximity to the vast majority of US consumers. The firm’s unique promise of a wide assortment of goods at low prices has allowed Walmart to retain its status as the nation’s preeminent retailer for over 30 years.

We plan to raise our $56 fair value estimate on wide-moat Walmart by a low- to- mid-single-digit percentage following its solid fiscal 2025 third-quarter earnings release that featured further market share wins at both its namesake banner and Sam’s Club. Growth in alternative profit streams such as membership fees and advertising also contributed favorably to the bottom line as the retail behemoth saw adjusted EPS expand 14% annually to $0.58 (outpacing our $0.54 forecast). While we acknowledge that Walmart’s attractive price points and burgeoning online presence should translate into continued growth on the top and bottom lines for years to come, we think shares look very overvalued, trading at more than 30 times our forecast for fiscal 2026 adjusted EPS.