Walmart Closes Fiscal 2026 With Record Digital Sales, a New CEO, and a Cautious Look Ahead

Walmart Closes Fiscal 2026 With Record Digital Sales, a New CEO, and a Cautious Look Ahead

Walmart reported fourth-quarter fiscal 2026 results on February 19, posting adjusted earnings per share of $0.74, one cent above Wall Street’s consensus estimate of $0.73. Total revenues for the quarter reached $190.7 billion, a 5.6% increase from the year-ago period. Net sales were $188.9 billion. Consolidated gross margin improved 13 basis points to 24.0%, and operating income grew 10.8% to $8.7 billion, outpacing sales growth for the third consecutive year. All three business segments grew profits faster than sales.

For the full fiscal year ending January 31, 2026, total revenues reached $713.2 billion, up 4.7%, with net sales of $706.4 billion, exceeding $700 billion for the first time. Full-year adjusted EPS was $2.64, one cent above estimates. Operating cash flow for the year reached $41.6 billion, up $5.1 billion, with free cash flow of $14.9 billion, up $2.3 billion year over year. The company increased its annual dividend to $0.99 per share.

Sales and Traffic

U.S. comparable sales rose 4.6% in the fourth quarter, excluding fuel, with digital contributing approximately 520 basis points to that comp, up from approximately 290 basis points in the year-ago quarter. Transactions grew 2.6% and average ticket grew 2.0%. Total like-for-like inflation at Walmart U.S. was 1.1%, down 20 basis points from Q3. Grocery like-for-like inflation was 0.6%, approximately 70 basis points lower than Q3, driven primarily by deflation in eggs and dairy. General merchandise like-for-like inflation was 3.2%, approximately 150 basis points higher than Q3.

Sam’s Club U.S. comparable sales grew 4.0%, excluding fuel, driven by a 5.3% increase in transactions. Sam’s Club e-commerce now represents 19% of net sales, excluding fuel, up approximately 300 basis points year over year. Sam’s Club membership fee revenue grew 6.1%, with particular strength in member count growth among Gen Z and Millennials.

E-Commerce and Fulfillment

U.S. e-commerce sales grew 27%, marking the fifteenth consecutive quarter of double-digit growth. E-commerce now accounts for 23% of Walmart U.S. net sales, a record high, up 550 basis points from two years ago. For the full fiscal year, global e-commerce surpassed $150 billion for the first time. U.S. e-commerce was profitable in each quarter of fiscal year 2026, with double-digit incremental margins. At fiscal year end, 8.6 billion items were available for same- or next-day delivery across the Walmart U.S. assortment.

Walmart now offers store-fulfilled fast delivery to 95% of U.S. households in under three hours. Expedited deliveries under three hours represented approximately 35% of store-fulfilled orders, and customers using that option grew more than 60% for the full year. Sam’s Club club-fulfilled express delivery sales grew 80% in Q4, and Sam’s Club now offers express delivery to 60% of U.S. households in less than three hours. Walmart International e-commerce grew 17% in the quarter and now represents 28% of International net sales in constant currency, with more than 37% of International e-commerce units delivered in under three hours.

Marketplace

Walmart U.S. marketplace sales grew approximately 20% in the quarter. Within the marketplace, categories including cook and dine, fashion, and home decor each grew more than 40%. Walmart Fulfillment Services is now used by 52% of marketplace sellers, a record high. Walmart added approximately 100 new brands to its U.S. assortment in fiscal year 2026, including Fender, Kenmore, Weber, and Stanley. Private brand sales mix increased more than 40 basis points. General merchandise overall grew low single digits in the quarter, with strength in fashion and hardlines led by auto care.

Advertising and Membership

The global advertising business grew 37% in the quarter and 46% for the full fiscal year, reaching nearly $6.4 billion. Walmart Connect, the U.S. digital advertising platform, grew 41% in the quarter, excluding Vizio. Membership fee revenue grew 15.1% globally in the quarter, with Sam’s Club China membership income up more than 35%, Walmart+ membership income in the U.S. up double digits, and Walmart International membership fee revenue up 31%. For the full fiscal year, membership fees exceeded $4.3 billion. Together, advertising income and membership fees represented nearly one-third of Walmart’s operating income in the quarter, according to CFO John David Rainey’s prepared remarks on the earnings call.

Technology and AI

Walmart’s AI shopping assistant Sparky is now used by roughly half of Walmart app users in the U.S. Customers who engage with Sparky have an average order value approximately 35% higher than non-Sparky users. CEO John Furner described Sparky as connecting digital intent to fulfillment through forward-deployed inventory and 1.5 million U.S. associates, turning AI engagement into immediate physical outcomes through fast delivery, pickup, or in-store fulfillment. The company is building out its agentic commerce capabilities in partnership with OpenAI and Alphabet. Furner said Walmart’s technology strategy is to build once and scale globally, using common platforms in tech, AI, and digital businesses to grow at lower marginal cost.

Supply Chain and Automation

Approximately 60% of Walmart U.S. stores are now receiving some freight from automated distribution centers, approximately 50% of U.S. e-commerce fulfillment center volume is automated, and 23 of 42 regional distribution centers are in various stages of automation retrofit. CFO Rainey said automation is enabling better inventory visibility, improved labor productivity, and the ability to grow the omnichannel business at lower marginal cost.

Store Investments

During Q4, Walmart U.S. opened four new supercenters and one new Neighborhood Market and completed approximately 125 store remodels. For the full fiscal year, the company opened 12 new stores and completed approximately 675 remodels. Sam’s Club U.S. opened one new club and completed 14 club remodels in fiscal year 2026. Management noted store and club remodel investments are outperforming internal plans.

Health and Wellness

Health and wellness posted high-single-digit comp growth at Walmart U.S. in Q4, driven by strong pharmacy script count growth and share gains. The segment reflects approximately 200 basis points of negative impact from Maximum Fair Pricing legislation on drug pricing, which took effect January 1. For the full fiscal year 2027, pharmacy is expected to represent a headwind of approximately 100 basis points to overall sales growth.

International

Walmart International delivered net sales of $35.9 billion in the quarter, up 11.5% on a reported basis and 7.5% in constant currency. Adjusted operating income grew 26.5% in constant currency, driven by lower e-commerce losses and lapping last year’s strategic investments. Results were led by China, Walmex, and Flipkart.

In China, e-commerce grew 28% and represented more than 50% of that market’s sales mix, up 360 basis points year over year, and Walmart opened 10 new clubs in China in the past 12 months. In Mexico, Walmex comp sales grew 3.3%, outpacing the ANTAD industry benchmark for the 11th consecutive quarter, with 186 new stores opened in the past 12 months. In Canada, e-commerce grew 31%. Flipkart is delivering orders in under 15 minutes across more than 30 cities in India. The timing of Flipkart’s Big Billion Days event, which fell more heavily in Q3 this fiscal year compared to Q4 last year, negatively affected International growth comparisons in the quarter.

Shopper Spending Patterns

CEO John Furner noted that Walmart continued to gain market share from households earning more than $100,000, who are shopping the retailer for groceries, fashion, and general merchandise. For households earning below $50,000, Furner said wallets are stretched and some shoppers are managing spending paycheck to paycheck. He added that even those households are now emphasizing convenience nearly as much as price. CFO Rainey described the current operating backdrop as “still somewhat unstable” and noted the spending gap between higher and lower earners had widened. On tariffs, Rainey said the retail industry has largely absorbed the brunt of tariff impacts and expects a more normalized pricing environment, with Walmart U.S. overall like-for-like inflation running at 1.1% in the quarter.

Outlook

For fiscal year 2027, Walmart guided for consolidated net sales growth of 3.5% to 4.5% in constant currency, adjusted operating income growth of 6% to 8% in constant currency, and adjusted earnings per share of $2.75 to $2.85. That EPS range fell below Wall Street’s forecast of $2.96. The effective tax rate is expected to be approximately 23.5% to 24.5%, and net interest expense is expected to increase approximately $200 to $300 million. Rainey said the company’s goal is to outperform the guidance provided, but that starting the year with conservatism was prudent given the uncertain backdrop.

For Q1 fiscal year 2027, Walmart guided for net sales growth of 3.5% to 4.5% in constant currency, operating income growth of 4.0% to 6.0% in constant currency, and adjusted EPS of $0.63 to $0.65. Management flagged that first-quarter operating income growth will trail other quarters due to timing of expenses and year-over-year tariff comparisons. Capital expenditure for fiscal year 2027 is expected to be approximately 3.5% of net sales, described by management as near the peak of annual spending on supply chain automation and store remodels. Beginning in Q1 FY27, Walmart is updating its corporate overhead cost allocation methodology across segments, with prior period amounts restated for comparability. The board authorized a new $30 billion share repurchase program, described by Rainey as the company’s largest to date, replacing the prior authorization from November 2022. During fiscal year 2026, the company repurchased 85 million shares for $8.1 billion.

Leadership and Context

This was the first earnings report under John Furner, who became president and CEO on February 1, succeeding Doug McMillon. Furner is a more than three-decade Walmart veteran who most recently served as president and CEO of Walmart U.S. Walmart’s stock moved to the Nasdaq in December 2025, and the company’s market capitalization crossed $1 trillion for the first time earlier in February 2026.

For the first time, Amazon surpassed Walmart as the largest company by annual revenue, reporting $716.9 billion for its most recent fiscal year compared to Walmart’s $713.2 billion in total revenues. The comparison is not direct, as a significant portion of Amazon’s revenue comes from cloud computing and other technology services.

Sources: Walmart Q4 FY26 Earnings Release (Form 8-K, February 19, 2026) · Walmart Q4 FY26 Financial Presentation · Walmart Q4 FY26 Earnings Call Transcript

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