Walmart beats, raises guidance; says tariff impact is less than expected
Investing.com -- Walmart Inc. (NYSE: WMT) reported better-than-expected third-quarter results on Wednesday, with the shares now up over 3% premarket having initially declined.
The company said on its earnings call that it is now seeing less impact from tariffs than it had expected earlier in the year.
Walmart posted adjusted earnings per share of $0.62, exceeding analyst estimates of $0.60, while revenue reached $179.5 billion, surpassing the consensus forecast of $177.45 billion. Revenue grew 5.8% YoY, or 6.0% in constant currency terms, driven by strong eCommerce performance, which surged 27% globally.
Walmart U.S. comparable sales increased 4.5% during the quarter, showing strength across categories. The company’s global advertising business jumped 53%, including VIZIO, with Walmart Connect in the U.S. up 33%. Membership income also saw robust growth of 16.7%.
"The team delivered another strong quarter across the business. eCommerce was a bright spot again this quarter," said Doug McMillon, President and CEO of Walmart. "We’re gaining market share, improving delivery speed, and managing inventory well."
Adding to the positives, Walmart raised its fiscal year 2026 outlook, now expecting net sales growth of 4.8% to 5.1% and adjusted operating income growth of 4.8% to 5.5%, both in constant currency. Adjusted EPS is projected to be between $2.58 and $2.63, up from the previous guidance of $2.52 to $2.62.
Walmart’s gross margin rate improved by 2 basis points, led by Walmart U.S., though partially offset by International due to the timing of Flipkart’s Big Billion Days event. Operating income decreased 0.2%, primarily due to a non-cash share-based compensation charge at PhonePe, while adjusted operating income increased 8.0% in constant currency.
"We expected a strong qtr from Walmart and they delivered," said Truist analyst Scot Ciccarelli in a note. "We believe that Walmart’s deep discount pricing, improving product quality and significant expansion of convenience options (especially home delivery, where 3hr or less shipping increased by 70%) is ideally suited for today’s environment and is enabling the company to gain share across customer cohorts."
Meanwhile, BMO Capital’s Kelly Bania said in a note that "WMT reported another beat and raise quarter, with very consistent performance across the business and against elevated, potentially overly optimistic expectations."
"Key ecommerce, membership, and advertising performance remained robust and continued to demonstrate WMT’s model works at scale," the analyst added.