Walmart's International Sales Up 10.5%: China & Walmex Drive Gains

Core Insights - Walmart Inc.'s International business showed strong performance in Q2 fiscal 2026, with sales increasing by 10.5% year over year in constant currency to $32.7 billion, driven by significant growth in China, Walmex, and Flipkart [1][9] Group 1: Regional Performance - China was the standout market, achieving a remarkable 30.1% growth in constant currency, with over half of sales coming from digital channels, reflecting Walmart's effective integration of physical and online sales [2][9] - Walmex experienced a 6.1% growth, supported by increased customer traffic and strong e-commerce adoption, particularly through pickup and delivery services, alongside festive sales and new store openings [3][9] - Flipkart contributed to growth with a solid performance in marketplace and advertising, leading to a 22% increase in international e-commerce sales, driven by store-fulfilled pickup and delivery [4][9] Group 2: Financial Metrics - Operating income in constant currency decreased by 2.8% as Walmart continued to invest in technology and growth initiatives in key markets like India, Canada, and Mexico, yet the sales momentum across international markets highlighted the segment's importance in Walmart's overall growth [5] - The Zacks Consensus Estimate indicates a projected year-over-year sales growth of 4% and earnings per share growth of 3.6% for the current financial year [10] Group 3: Market Position and Valuation - Walmart's stock has performed well, with shares rising 32% over the past year, outperforming the industry growth of 25.4%, while competitors like Costco and Target showed varied performance [6] - The forward 12-month price-to-earnings ratio for Walmart is 37.93, which is higher than the industry average of 33.04, indicating a premium valuation compared to Target but a discount relative to Costco [7]