Walmart Jumps in Premarket After Reporting Strong Q3 Earnings

Walmart (NYSE: WMT | WMT Price Prediction) reported third-quarter fiscal 2026 results before the bell Thursday, beating on both the top and bottom lines. The stock traded near $102 in premarket action, up modestly from Wednesday’s close of $101.64. Investors liked the guidance raise and eCommerce momentum. I thought the consistency across segments was the real standout here.

Revenue and Profit Beat Expectations

Walmart posted adjusted earnings per share of $0.62, topping the $0.60 consensus by 3.3%. Revenue came in at $179.5 billion, ahead of the $175.2 billion estimate. That’s a 5.8% jump from the prior year. Net income surged 33% to $6.09 billion. CEO Doug McMillon noted the company is “working hard to save our customers’ and members’ time and money, while simultaneously transforming our business for the future.”

The company delivered strong growth across channels. Global eCommerce rose 27%. Advertising revenue climbed 28%. Membership income increased 22%. Operating income came in nearly flat at $6.70 billion, down just 0.2% due to a non-cash PhonePe share-based compensation charge. Without that, the operating leverage story held up well.

Momentum Builds Across All Segments

Walmart U.S. led with net sales of $120.7 billion, up 5.1%. Comparable sales rose 4.5%. The segment continues gaining market share in both grocery and general merchandise. McMillon pointed out that “households earning more than $100,000 made up 75% of our share gains.” That’s a significant shift in customer mix.

International delivered the strongest growth at 10.8%, with net sales hitting $33.5 billion. Sam’s Club posted $23.6 billion in net sales, up 3.1%. CFO John David Rainey highlighted that store-fulfilled delivery “increased nearly 50% and surpassed a $2.5 billion monthly run rate.”

I liked how the marketplace business is scaling. It grew 42% in the quarter with SKU count approaching 700 million items. Walmart Connect, the company’s advertising platform, grew 26% in the U.S. These alternative revenue streams are becoming meaningful contributors to profit growth.

e-Commerce Profitability Improves

The company made real progress narrowing eCommerce losses. Rainey noted “the third consecutive quarter of approximately 40% reduction in U.S. net delivery cost per order.” That efficiency gain matters. The business model is starting to work as designed, with operating income growing faster than sales.

Sam’s Club CEO Chris Nicholas shared that Scan & Go penetration increased more than 250 basis points. About 70% of members now exit without a traditional checkout. Member satisfaction scores on exit are close to 90%. Since launching new perks in August, eCommerce growth accelerated by more than 700 basis points versus first-half trends.

Key Figures

Adjusted EPS: $0.62 vs. $0.60 expected; up from $0.58 year over year
Revenue: $179.5B vs. $175.2B expected; up 5.8%
Net Income: $6.09B; up 33%
Operating Cash Flow: $27.5B; up 318%
Free Cash Flow: $8.83B after $18.6B capex; up 201%

The cash generation numbers are notable. Free cash flow more than doubled. That gives the company plenty of room to invest in technology and return capital to shareholders. They repurchased 75.3 million shares year to date under the $7 billion authorization.

Management Raises Full-Year Outlook

Walmart lifted fiscal 2026 guidance. The company now expects adjusted EPS of $2.58 to $2.63. On a constant currency basis, sales growth is projected at 4.8% to 5.1%, up from prior guidance of 3.75% to 4.75%. Operating income growth is now expected at 8.5% to 9.25%, compared to the previous range of 6.5% to 8%.

Rainey emphasized that “compared to our guidance that we provided at the start of the year, we now expect operating income to grow nearly 400 basis points more at the midpoint.” That’s a substantial increase in confidence.

McMillon addressed the inflation environment, noting “we had almost no like-for-like inflation in the U.S. this quarter.” General merchandise grew low single digits even as prices deflated by over 4%. The company currently has about 6,000 rollbacks across all categories.

Holiday Season Looks Promising

Walmart U.S. CEO John Furner said the company had “a good back-to-school” and “a good Halloween” and goes into the holiday season with momentum. I’d listen for how they frame Black Friday trends and inventory positioning on future calls. The consistency in execution across quarters suggests they’re managing the business well heading into the critical fourth quarter.