Walmart Inc. (WMT) delivered a knockout quarter Thursday morning, sailing past Wall Street's profit expectations and showing that its transformation into a digital-first retail powerhouse is paying off in a big way.
The stock had a moment of doubt initially, dropping as much as 2.5% right after the earnings release. But then management hopped on the conference call and apparently said all the right things, because shares quickly reversed course and climbed about 3% by midday.
For the third quarter, Walmart posted adjusted earnings of 62 cents per share, beating the consensus estimate of 60 cents. Revenue came in at $179.50 billion, up 5.8% year-over-year and ahead of the $177.429 billion analysts were expecting. Not bad for a company that's been around since 1962.
The Digital Transformation Is Real
Here's where things get interesting. Walmart isn't just selling groceries and household goods anymore. The company is leaning heavily into e-commerce, digital advertising, and international growth through India's Flipkart and its China operations.
Global e-commerce sales jumped 27%, driven by strong performance in store-fulfilled pickup and delivery services, plus its expanding marketplace business. And get this: the company's global advertising operations, now including VIZIO, surged 53%. Walmart Connect in the U.S. alone posted a 33% increase. Walmart is essentially building an advertising empire inside a retail business.
Membership income is also climbing, up 9% overall with global membership fee revenue jumping 17%. People are paying to shop at Walmart, and they're happy about it.
Breaking Down the Segments
Walmart U.S. generated $120.7 billion in revenue, up 5.1% from last year. The growth came from strong e-commerce momentum and market share gains across grocery, health and wellness, and general merchandise. U.S. comparable sales, excluding fuel, rose 4.5%.
The international business is absolutely cooking right now. Sales increased 10.8% to $33.5 billion, with Flipkart, China, and Walmex leading the charge. Transaction counts and unit volumes improved across key markets.
Sam's Club pulled in $23.6 billion in revenue, up 3.1%, with comparable sales growth of 3.8% excluding fuel. Grocery and general merchandise strength drove the gains, along with continued market share wins.
What Management Is Saying
On the earnings call, executives revealed that inflation is now running in the low-1% range. They credited smart inventory management and product mix decisions for keeping things under control.
The team also noted they've seen less tariff impact than they initially expected earlier in the year. There's been some relief across key food categories, with the only real pricing pressure coming from beef, which they chalked up to normal commodity cycles.
Perhaps most notably, CEO Doug McMillon said that upper and middle-income households are driving U.S. growth. Walmart continues to benefit from higher-income families shopping more frequently at its stores. This is a significant shift from Walmart's traditional positioning as primarily a discount retailer for budget-conscious shoppers.
Hello, Nasdaq
In a somewhat surprising move, Walmart announced it will transfer its stock listing from the New York Stock Exchange to the Nasdaq Global Select Market on December 9, 2025. The ticker will stay "WMT," so no need to update your watchlists.
The company said the switch reflects its alignment with Nasdaq's technology-driven, innovation-focused platform. CFO John David Rainey said the change supports Walmart's "people-led, tech-powered omnichannel strategy" and marks a new phase of growth. Nine outstanding bonds will also move to Nasdaq as part of the transition.
The Numbers Behind the Headlines
Quarterly gross margin improved by two basis points, led primarily by Walmart U.S. and international results. There was a partial offset due to the timing of Flipkart's Big Billion Days event.
Operating income technically slipped 0.2%, but that's mainly because of a non-cash share-based compensation charge at PhonePe ahead of a potential IPO. On an adjusted basis, operating income rose 8.0%, showing the underlying business is actually quite strong.
Walmart ended the quarter with $10.582 billion in cash and equivalents. Long-term debt due within one year was $3.523 billion, up from $3.246 billion a year ago.
Looking Ahead
Management is feeling confident enough to raise guidance across the board. The company lifted its fiscal 2026 adjusted EPS outlook to $2.58-$2.63, up from the earlier range of $2.52-$2.62. The updated midpoint beats the $2.61 analyst consensus.
Walmart also raised its fiscal 2026 constant-currency revenue growth outlook to 4.8%-5.1%, up from the prior range of 3.75%-4.75%. And the adjusted operating income growth outlook now sits at 4.8%-5.5%, compared with an unchanged range earlier in the year.
Shares were trading up 3.14% to $103.77 in premarket trading Thursday.
