Key Takeaways Walmart to report Q4 results on Feb. 19, with revenues seen near $190B and EPS at 73 cents. Walmart's e-commerce, ads and membership income support sales and margins. Walmart faces tariff costs and trades at a premium 45.31 forward P/E. Walmart Inc. (WMT) is scheduled to report its fourth-quarter fiscal 2026 earnings on Feb. 19. The retail giant has been benefiting from steady traffic trends, robust omnichannel growth, improving merchandise mix, and rising contributions from membership and adv ...

Core Insights - Walmart Inc. (WMT) has solidified its position as a resilient and strategically positioned leader in global retail, evolving beyond traditional big-box operations to integrate low prices with a robust omnichannel ecosystem, resulting in a market capitalization exceeding $1 trillion [1] Stock Performance - Walmart's stock has shown steady momentum, with a 22.4% increase over the past year, outperforming the Zacks Retail – Wholesale sector's decline of 0.5% and the S&P 500's rise of 17.7% [3][6] - The stock recently reached a 52-week high of $131.79 on February 9 [2] Valuation Analysis - Currently, Walmart trades at a forward price-to-earnings ratio of 42.93, slightly above the industry average of 39.81, reflecting its scale and diversified revenue streams [4] - Compared to peers, Walmart's valuation is justified given its consistent earnings profile, with Target and Kroger trading at 14.57 and 12.86, respectively [4] Growth Drivers - Walmart is gaining market share across various categories, including grocery and health & wellness, with grocery being a key traffic driver that enhances customer loyalty [7] - E-commerce is a significant growth area, with digital sales expanding due to store-fulfilled delivery and curbside pickup, leveraging Walmart's integrated store network for efficiency [8] - Membership income from programs like Sam's Club and Walmart+ is contributing to stable revenue streams and customer retention [9] International Operations - Walmart's international markets, particularly in Mexico and China, are performing well, providing growth opportunities and diversification beyond the U.S. market [10] Operational Efficiency - Investments in automation and supply-chain modernization are enhancing productivity and reducing costs, allowing Walmart to pursue profit growth faster than sales [11] Earnings Estimates - Recent upward revisions in earnings estimates indicate stable analyst sentiment, with the Zacks Consensus Estimate for the current fiscal quarter increasing to $0.73 [12][14] Final Assessment - Walmart's consistent sales growth, market-share gains, and expansion into higher-margin businesses support its long-term strength, with the recent market cap milestone reflecting investor confidence [16]

Core Insights - Walmart is undergoing a significant leadership transition as CEO Doug McMillon retires, with John Furner stepping in to implement key changes in the management team, which are essential for the company's future growth [1][7]. Company Overview - Walmart operates 10,800 stores globally, including 4,606 in the U.S., and generates annual sales of $681 billion, with $121.9 billion from international markets and over $120 billion from e-commerce [2][10]. Leadership and Management Changes - The transition to new leadership is critical, as the right leaders are essential for navigating the complexities of running a large corporation [5]. - McMillon, a 40-year veteran, has led Walmart through transformative challenges, including the COVID-19 pandemic and significant international expansion [6]. - John Furner has initiated a series of promotions and changes in the management team, with compensation details revealing a total of $28.5 million, highlighting the ongoing concerns regarding the pay disparity between executives and average employees [8][9].

Core Insights - Walmart Inc. and Google are collaborating to launch a new shopping experience that integrates Google's Gemini with Walmart and Sam's Club offerings, aiming to enhance the shopping process for customers [1][2] Group 1: New Shopping Experience - The new experience will utilize the Universal Commerce Protocol to create a more intuitive and reliable shopping environment for customers [1] - This initiative represents a shift from traditional web or app searches to agent-led commerce, positioning Walmart as a leader in this evolution [2] Group 2: Features of the New Experience - The experience will first be available in the U.S. and will expand internationally thereafter [3] - Gemini will automatically include relevant Walmart and Sam's Club products, enhancing the shopping experience through personalized recommendations based on past purchases [5] - Customers can expect fast delivery options, with items delivered in under three hours and as quickly as 30 minutes [5] Group 3: Company Overview - Walmart Inc. reported a fiscal year 2025 revenue of $681 billion and employs approximately 2.1 million associates globally, serving around 270 million customers weekly across over 10,750 stores [4]

Group 1: Generation Z and Retail Influence - Generation Z, born between 1997 and 2012, is currently aged 13 to 28 and is starting to influence the economy as they begin their careers and earn money [1] - Gen Z is characterized as digitally native, socially conscious, and valuing authenticity, which impacts their shopping preferences and brand loyalty [2] Group 2: Big Box Stores Performance - Walmart (WMT) has shown strong historical performance, with a year-to-date return of 17.45%, outperforming the S&P 500's 12.26% [2] - Walmart's returns over different time frames are impressive: 1-year (20.32% vs. 11.00%), 3-year (117.20% vs. 67.17%), and 5-year (15.45% vs. 85.61%) [2] - Analysts favor Walmart, with 40 out of 42 rating it a buy or strong buy [3] Group 3: Target's Decline - Target Corporation (TGT) has faced a significant decline, with a year-to-date stock drop of 35.18% following the rollback of its diversity, equity, and inclusion programs [4] - Target's performance over various periods is negative: 1-year (-24.76%), 3-year (-38.46%), and 5-year (-41.58%) [4] - Analysts generally recommend holding Target, with 22 out of 37 suggesting this, while only seven rated it a buy [5] Group 4: E-Commerce Trends Among Gen Z - Gen Z is increasingly shopping online, with a report indicating that in 2024, 37% of online shoppers made purchases through Facebook, 28% through Instagram, and 18% through TikTok [6] - Smaller companies benefit from the exposure provided by social media platforms, although direct investment in these companies may not be possible [7] Group 5: Meta Platforms Performance - Meta Platforms, Inc. (META), which includes Instagram and Facebook, is part of the "Magnificent 7" technology stocks [8] - While Meta has had positive short-term performance, it has not kept pace with the S&P 500 year-to-date (1.73%) or over the past year (5.87%) [8] - However, Meta's long-term returns are strong, with 3-year (444.25%) and 5-year (121.7%) performance being exemplary [8]

Core Insights - Walmart Inc. reported a 17% year-over-year increase in membership income for Q3 fiscal 2026, highlighting the growing significance of fee-based revenues in its operating model [2][11] - The overall membership and other income rose by 9%, indicating steady momentum across various regions and formats [2] Membership Performance - International membership income surged by 34%, primarily driven by Sam's Club China, which saw increased member engagement and penetration [3][11] - In the U.S., Walmart Plus membership income grew at a double-digit rate, supported by strong net additions and enhanced service offerings [3] - Sam's Club U.S. experienced a 7% growth in membership income, aided by increases in member counts, renewal rates, and Plus member participation [3] Revenue Composition - Membership fees and advertising income contributed approximately one-third of consolidated adjusted operating income, reflecting a higher margin profile compared to traditional merchandise sales [4][11] - The 17% rise in membership income underscores Walmart's increasing reliance on recurring fee revenues as a significant contributor to profitability [6] Membership Program Enhancements - Walmart Plus achieved its strongest quarter of net additions since its launch, driven by faster delivery speeds, improved service levels, and new benefits like the OnePay cash rewards credit card [5] - These enhancements have positively impacted member engagement and retention during the quarter [5] Industry Comparisons - Target Corporation reported nearly 18% growth in non-merchandise sales, with membership and advertising revenues rising at double-digit rates, indicating a similar trend in leveraging fee-based revenues [7] - Costco Wholesale Corporation reported membership fee income of $1.329 billion, up 14% year-over-year, with a total of 81.4 million paid members, showcasing the profitability of its membership model [8] Financial Outlook - The Zacks Consensus Estimate for Walmart's current fiscal year indicates expected year-over-year growth of 4.6% in sales and 4.8% in earnings per share [9][12] - Walmart's shares have increased by 23.9% over the past year, slightly outperforming the industry's growth of 23.5% [10]

Core Insights - Costco Wholesale Corporation's first-quarter fiscal 2026 performance demonstrates the resilience of its membership business model, with membership income increasing by 14% to $1,329 million, driven by strong renewal rates and a recent membership fee increase [1][8] Membership Growth - Sustained membership growth is the main driver behind the increase in membership fees, with paid households rising by 5.2% to 81.4 million and total cardholders growing by 5.1% to 145.9 million [2] - Executive memberships saw a significant increase of 9.1% year-over-year, reaching 39.7 million, and now represent 74.3% of total sales [2] Customer Loyalty and Renewal Rates - The company has established strong customer loyalty, reflected in a membership renewal rate of 92.2% in the U.S. and Canada, and 89.7% globally, despite a slight decline of 10 basis points sequentially [3] - Proactive communication efforts aimed at improving retention have helped mitigate some pressure on renewal rates [3] Stability of Membership Income - Costco's membership income remains stable and recurring, supported by pricing leverage, an expanding base of paid households, and upgrades to executive memberships [4] Industry Comparisons - BJ's Wholesale Club reported a 9.8% increase in membership fee income to $126.3 million, with strong member acquisition and retention [5] - Walmart Inc. experienced a 17% growth in global membership fee income, driven by Walmart+ and Sam's Club, indicating a trend of embedding membership income into broader retail operations [6] Stock Performance and Valuation - Costco's stock has declined by 10.9% over the past year, contrasting with the industry's growth of 1.7% [7] - The forward 12-month price-to-earnings ratio for Costco stands at 42.99, higher than the industry average of 30.15, indicating a relatively high valuation [9] Financial Estimates - The Zacks Consensus Estimate for Costco's current financial-year sales implies a year-over-year growth of 7.6%, while earnings per share are expected to grow by 11.3% [10]

Core Insights - Walmart, Inc. (WMT) has shown strong performance in 2025, with shares increasing by 25.3% year to date, reflecting investor confidence in its execution and growth strategies [1][2] Group 1: Performance Metrics - Walmart's growth outpaces the retail industry's 24.6% increase, the Zacks Retail – Wholesale sector's 6.7% rise, and the S&P 500's 18.6% gain this year [2] - Compared to major competitors, Walmart has outperformed Target Corporation (TGT), The Kroger Co. (KR), and Costco Wholesale Corporation (COST), with Target declining by 30% year to date [2] Group 2: Growth Drivers - The company's fundamentals are strong, with broad-based sales and profit growth across Walmart U.S., Sam's Club, and International segments [3] - E-commerce sales surged by 27% in Q3, with U.S. e-commerce growing by 28% and International by 26%, supported by faster delivery and improved digital capabilities [4][8] - Walmart's omnichannel ecosystem is expanding, benefiting from strong grocery traffic and notable growth in fashion and general merchandise [5] - Higher-margin revenue streams, including advertising and membership, now account for about one-third of consolidated adjusted operating income [6][8] - Investments in automation and AI are enhancing fulfillment efficiency and supporting margin performance [9] Group 3: Challenges and Considerations - Despite strong fundamentals, challenges remain, including a merchandise mix leaning towards lower-margin categories and cost pressures from tariffs [10] - Upcoming legislation affecting the pharmacy business and moderation in discretionary spending could limit growth in general merchandise categories [11] Group 4: Valuation and Market Position - Walmart's forward 12-month P/E ratio stands at 39.13X, above the industry average of 35.61X, indicating limited room for further multiple expansion [12] - The elevated valuation is supported by consistent execution and growth in higher-margin businesses, but it makes the stock sensitive to changes in consumer spending [13] Group 5: Analyst Outlook - Analysts' earnings estimates for Walmart have increased, indicating expectations for sustained strong growth despite current challenges [14] - The Zacks Consensus Estimate for fiscal 2026 and 2027 EPS has risen over the past 30 days, reflecting positive sentiment [14] Group 6: Summary and Future Outlook - Walmart enters 2026 with strong momentum in e-commerce, membership, marketplace, and advertising, supported by improved delivery and inventory management [17] - While margin pressures from various factors may impact performance, Walmart's durable business model and long-term initiatives make it a compelling hold for investors [18]

Core Insights - Walmart Inc. is set to report its third-quarter fiscal 2026 earnings on November 20, with expectations of solid performance driven by strong momentum in both store and digital channels, an improved merchandise mix, and increasing contributions from membership and advertising [1][10] Revenue and Earnings Estimates - The Zacks Consensus Estimate for third-quarter revenues is $177.1 billion, reflecting a 4.5% increase year-over-year, while the consensus for earnings has risen to 61 cents per share, marking a 5.2% increase from the previous year [2] - Walmart has a trailing four-quarter average earnings surprise of 2.8%, although it experienced a negative earnings surprise of 6.9% in the last reported quarter [2] Earnings Prediction - The Zacks model predicts an earnings beat for Walmart, supported by a positive Earnings ESP and a Zacks Rank of 3 (Hold) [3][4] Factors Influencing Q3 Earnings - Steady demand and market share gains are expected to be reflected in the upcoming results, with consistent performance across income groups and strength in grocery and consumables [5] - Digital sales momentum is significant, with global e-commerce sales growing 25% in the second quarter, driven by store-fulfilled delivery and a robust marketplace [6] - Higher-margin businesses are contributing positively, with advertising revenue increasing by 46% globally and membership income rising over 15% [7] - International markets, including China and Flipkart, are showing strong constant-currency growth, although currency fluctuations may pose challenges [8] Challenges Ahead - Tariff-related cost increases and elevated self-insured liability and workers' compensation costs are key headwinds for the quarter [9][10] Stock Performance - Over the past year, Walmart's stock has increased by 18.9%, outperforming the Zacks Retail – Supermarkets industry growth of 18.3% and the S&P 500's rise of 15.7% [11] - Walmart's stock has surpassed competitors like Kroger, Costco, and Target in terms of stock performance [13] Valuation Metrics - Walmart shares are currently trading at a forward 12-month price-to-earnings ratio of 36.02, above the industry average of 32.78, indicating a premium valuation due to consistent execution and stronger digital profitability [14][16] Investment Outlook - With solid traffic trends, strong omnichannel growth, and expanding higher-margin profit streams, Walmart is positioned for stability and steady growth, despite near-term hurdles [18]

Core Viewpoint - Walmart President and CEO Doug McMillon will retire on January 31, 2026, and will be succeeded by Walmart U.S. CEO John Furner, marking a significant leadership transition for the company [1][2]. Leadership Transition - McMillon will remain on the board of directors until the June 2026 annual shareholders' meeting and will serve as an adviser to Furner until January 31, 2027 [2]. - Furner will continue as CEO of Walmart U.S. until January 31, 2026, with plans to appoint his successor before the end of fiscal year 2026 [3]. John Furner's Background - Furner has been with Walmart since 1993, starting as an hourly associate, and has held various leadership roles, including president and CEO of Sam's Club from January 2017 to October 2019 [4]. - He was appointed president and CEO of Walmart U.S. in November 2019, and has been recognized for his effective leadership and embrace of technology [5]. Company Leadership Comments - Greg Penner, chairman of Walmart Inc., praised Furner for his comprehensive understanding of the business and his leadership during a time of rapid change, emphasizing his role in guiding Walmart's growth and transformation [5]. - Penner also expressed gratitude to McMillon for his extraordinary leadership and impact on the company, highlighting the transformation he led over more than a decade [6][7].