In a world where every dollar counts, Walmart's latest earnings report reveals a fascinating trend: Value is king, and consumers are flocking online to find it. This quarter's results paint a clear picture of how shoppers are adapting to the current economic climate. Let's dive in!
Walmart's third-quarter earnings for fiscal year 2026, released on November 20th, showcase a significant shift in consumer behavior. Across the board, customers are prioritizing value, and they're increasingly turning to digital channels to find it. This focus on value drove impressive growth, with global eCommerce sales surging by 27%. Moreover, every segment experienced eCommerce growth exceeding 20%, solidifying Walmart's omnichannel gains.
As Doug McMillon, Walmart's outgoing CEO, highlighted, there was positive momentum in transactions and unit volume across all segments. The retail giant is gaining market share in both grocery and general merchandise within the United States.
But here's where it gets controversial... While spending remains consistent, the pressure isn't distributed evenly. Higher-income households demonstrated strength, middle-income customers remained stable, and lower-income families faced increased challenges, according to McMillon. This disparity underscores the varied impact of economic pressures on different consumer groups.
Chief Financial Officer John David Rainey noted that the overall environment is stable, with only "pockets of moderation," and holiday activity is off to a strong start.
During the quarter, like-for-like inflation in Walmart U.S. measured 1.3%. Food and general merchandise saw low single-digit increases, reflecting the ongoing impact of inflation on essential goods.
eCommerce, Delivery Speed, and Membership Fuel Growth
Walmart's digital performance was a standout, with U.S. eCommerce sales soaring by 28%. This marks the seventh consecutive quarter of over 20% growth, driven by pickup, delivery, and advertising.
"Approximately 35% of store-fulfilled orders were expedited or delivered in under three hours, and sales through these expedited channels increased nearly 70% this quarter," Rainey explained. This highlights Walmart's commitment to speed and convenience.
Membership and other income in Walmart U.S. grew by 7.6%, with double-digit Walmart+ fee income. Globally, membership income increased by 17%. Rainey noted that the third quarter was the best for Walmart+ in terms of net additions since its launch, crediting faster delivery, improved accuracy, and the introduction of the OnePay credit card, which offers 5% back on Walmart purchases.
Category Strength Across Grocery, Health and Wellness, and General Merchandise
Consumers continued to prioritize food and essential categories, but Walmart also reported gains in discretionary areas. U.S. grocery comp sales rose in the low single digits, supported by strong fresh food performance and increased unit volumes. Health and wellness grew in the low double digits, aided by a higher branded drug mix and strong optical sales. General merchandise rose in the low single digits, led by fashion, home, and automotive. Marketplace categories such as apparel, electronics, and toys expanded by more than 40%.
International markets mirrored these strong results, with net sales up 11.4% in constant currency and eCommerce growing 26%.
Income Levels, Holiday Spending, and the Omnichannel Shift
Executives expressed optimism heading into the holiday season. Early indicators, such as back-to-school and Halloween sales, were positive, and Rainey anticipates Q4 to perform similarly to the first part of the year.
Pickup and delivery remain central to the channel shift. Walmart now offers store-fulfilled fast delivery to 95% of U.S. households in under three hours.
At Sam's Club, curbside pickup became free for all members, and club-fulfilled delivery grew triple digits. Scan & Go adoption reached 36%.
The third-party seller network is also a key driver, with U.S. marketplace sales climbing 17%. Walmart Connect U.S. advertising grew 33%, while global advertising increased 53%, including Vizio.
FinTech, Payments, and Digital Enhancements
Management highlighted several payments-related and FinTech capabilities. Walmart expanded its OnePay credit card, which integrates into the Walmart+ ecosystem and offers cash rewards. The company also introduced new OpenAI-powered integrations that allow customers to buy items directly through ChatGPT and support associates with software development tools. McMillon stated these capabilities will create "more personalized and relevant" experiences and be more conversational across voice, text, image, and video.
Walmart continues to automate distribution and fulfillment centers, with over 60% of U.S. stores receiving some freight from automated distribution centers and over 50% of U.S. eCommerce fulfillment center volume now automated.
And this is the part most people miss... Walmart's ability to adapt to changing consumer preferences, invest in technology, and optimize its supply chain is a testament to its resilience.
What do you think about Walmart's strategy? Do you agree that value is the primary driver of consumer behavior? Share your thoughts in the comments below!
