Walmart Earnings Preview: Can WMT Reach A New All-Time High? (Part Two)

Core Insights - The influx of higher-income consumers is significantly benefiting Walmart, leading to increased visits and purchases of higher-margin items [1] - Walmart's e-commerce and advertising segments are driving substantial growth, with e-commerce sales increasing by 27% globally [5][10] - Walmart's operational improvements and strategic investments are reflected in raised sales and earnings guidance for fiscal 2026 [12][13] Group 1: Consumer Trends - Higher-income consumers are increasingly attracted to Walmart for convenience, quality, and low prices, resulting in more frequent visits and purchases of premium products [1] - The growth in affluent shoppers is creating a multiplier effect, enhancing e-commerce growth and increasing subscriptions to Walmart+ [2] Group 2: E-Commerce Growth - Walmart achieved its first profitable quarter for e-commerce operations in May 2025, marking a significant transformation in its business model [4] - Global e-commerce sales surged 27%, with U.S. sales increasing by 28%, driven by store-based order fulfillment and a growing third-party marketplace [5] Group 3: Speed and Delivery - Walmart's ability to deliver orders within three hours to 95% of American households has been a critical factor in its e-commerce success [6] - Revenue from faster deliveries has increased by 70% year over year, highlighting speed as a competitive advantage [7] Group 4: Marketplace and Advertising - Walmart's online marketplace has expanded to over 500 million items, attracting more customers and generating commission revenue from third-party sellers [8] - The advertising business has grown by 53%, now representing a $4 billion revenue stream, showcasing high margins and low capital requirements [10][9] Group 5: Financial Performance and Stock Outlook - Walmart has raised its full-year sales forecast multiple times, indicating strong operational momentum and confidence in future growth [11][12] - Walmart shares have increased approximately 20% in 2026, significantly outperforming the S&P 500, reflecting a shift in investor perception towards a growth-oriented company [14][15]