Walmart Inc. (NYSE: WMT) delivered a resilient third quarter of FY 2026, on the back of growing digital sales, increased customer engagement through membership offerings, and stronger operational execution in its U.S. retail and international businesses. Total revenue rose 5.8% to $179.5 billion, or 6.0% in constant currency, with comparable sales in Walmart U.S. increasing 4.5% excluding fuel, driven by higher transactions, double-digit growth in store-fulfilled delivery, and continued market share gains across key income brackets. Adjusted EPS grew 6.9% to $0.62, despite the impact of a one-time non-cash share-based compensation expense tied to preparations for a potential IPO of its PhonePe business.
Investor sentiment remained positive as the world’s largest retailer raised its fiscal 2026 guidance for the second time, now anticipating net sales growth of 4.8% to 5.1% and adjusted EPS between $2.58 and $2.63. The stock reaction remained stable following the release, signaling confidence in the company’s execution and long-term digital-led strategy.
eCommerce Operations Drive Growth
Walmart’s U.S. business continued to set the pace for its omnichannel transformation. U.S. revenue reached $120.7 billion during the quarter, up 5.1%, with comp sales growing 4.5%. Higher in-store traffic and improving unit volumes drove topline expansion while digital offerings remained a key growth engine. Store-fulfilled delivery surged nearly 70%, and Walmart Connect, the company’s retail media platform, continued to deepen monetization as advertising sales rose 33%. The improvement in inventory discipline also supported profitability, and gross margins improved by 19 basis points. As a result, operating income for Walmart U.S. grew 6.3%, outpacing revenue growth and reflecting meaningful efficiencies in eCommerce economics.
International operations saw strong sales momentum, particularly in Flipkart, Walmex, and China. Net sales grew to $33.5 billion, rising 10.8% in reported terms and 11.4% in constant currency. Although reported operating income declined due to the PhonePe-related charge, adjusted operating income grew 16.9% in constant currency to $1.4 billion. Timing effects, such as Flipkart’s Big Billion Days event and growth in Marketplace-led inventory models, contributed to both the sales lift and shifting expense profile during the period.
Sam’s Club U.S. delivered another steady quarter with sales rising 3.1% and membership revenue increasing more than 7%. Strength in grocery, improved merchandising, and continued growth in Scan & Go usage helped support the segment’s performance, while eCommerce penetration continued to increase and now represents a notable share of the overall business mix.
Strong Liquidity And Returns
Walmart’s operating cash flow at the end of the quarter increased to $27.5 billion, up $4.5 billion from last year. Free cash flow also expanded to $8.8 billion, an increase of $2.6 billion, even as the company maintained elevated investment levels to support automation, store upgrades, and fulfillment capacity. Inventory increased 3.2%, remaining well below the rate of sales growth, reflecting a continued emphasis on lean replenishment models and forecasting precision. Walmart repurchased approximately $0.8 billion in stock during the quarter, with $5.1 billion still remaining under its current share repurchase authorization. Return on assets increased to 8.4%, while return on investment moderated to 14.8% due to higher capital spending and the one-time PhonePe compensation event.
Pivot Towards Omnichannel Platform
Walmart continued advancing its long-term ambition to evolve from a traditional retailer into a technology-enabled omnichannel platform. The quarter highlighted increasing traction across Walmart’s digital ecosystem, including marketplace expansion, data-driven retail media monetization, and enhanced membership economics. The integration of VIZIO helped strengthen its advertising product stack and contributed to the 53% global growth in retail media revenue.
Fulfillment automation and last-mile logistics remain central to Walmart’s competitive positioning, and the company now offers delivery in under three hours to nearly 95% of U.S. households — a milestone that reinforces the company’s push toward speed and efficiency. Meanwhile, the strong growth in Walmart+ and Sam’s Club membership revenue underscores the growing role of subscription-based models in driving loyalty, recurring spends, and higher digital engagement.
Improved Guidance On eCommerce Growth
Walmart expects the current growth momentum to continue through the rest of FY 2026, subject to seasonality and certain unforeseen events. The retailer anticipates the annual net sales to grow between 4.8% and 5.1%, up from the previous guidance of 3.75% to 4.75%. The updated outlook assumes sustained double-digit digital growth, stable consumer spending patterns, and continued improvements in eCommerce profitability.
Further, the adjusted operating income is expected to grow between 4.8% and 5.5% in constant currency, higher from the earlier forecast of 3.5% to 5.5%. Adjusted EPS is now projected in the range of $2.58 to $2.63, up from prior estimate of $2.52 to $2.62, reflecting both top-line confidence and improving operating leverage. Also, the management reaffirmed capital expenditure expectations of approximately 3.5% of net sales.
Conclusion
Walmart’s third quarter results demonstrate the continued payoff from years of investment in digital fulfillment, advertising, automation, and membership-led engagement. The company’s ability to grow sales, expand eCommerce economics, and lift guidance despite inflation, cost pressures, and restructuring activity positions it strongly for fiscal 2027. With accelerating online adoption, growing ecosystem monetization, and disciplined margin execution, Walmart is increasingly operating less like a traditional retailer and more like a scaled commerce technology platform.