Walmart Inc. WMT is increasingly evolving from a traditional retail operator into a multi-engine profit platform, with its latest quarter reinforcing how diversified income streams are reshaping the company’s earnings profile.
At a fundamental level, the shift is visible in the way profits are growing faster than sales. Fourth-quarter fiscal 2026 revenues rose 5.6% to $190.7 billion, while adjusted operating income climbed 10.5% at constant currency, reflecting stronger contribution from higher-margin businesses alongside core retail. Global e-commerce sales surged 24%, continuing to scale as a key growth driver.
What stands out is the changing composition of profits. Advertising and membership income are emerging as meaningful contributors, with advertising up 37% globally and Walmart Connect in the United States growing 41%. Membership fee income increased 15.1% worldwide. Together, these streams now account for a significant share of operating income, highlighting a clear shift toward recurring and margin-accretive revenue sources.
This diversification is supported by the broader omnichannel ecosystem. E-commerce growth remains robust across segments, including 27% in Walmart U.S., 17% internationally and 23% at Sam’s Club. At the same time, improved e-commerce economics, better inventory management and disciplined cost control are helping expand margins, enabling profits to outpace sales growth for the third consecutive year.
The underlying takeaway is that Walmart’s resilience is no longer tied solely to volume-driven retail performance. Instead, a more balanced mix of advertising, memberships, marketplace and digital fulfillment is strengthening earnings stability. This evolving structure positions the company to better absorb external pressures while sustaining profit growth through multiple levers.
What Do the Latest Metrics Say About Walmart?
Walmart, which competes with Costco Wholesale Corporation COST and Target Corporation TGT, has seen its shares rally 36.4% over the past year compared with the industry’s 34.1% growth. Shares of Costco and Target have gained 3.3% and 34.1%, respectively, in the aforementioned period.
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From a valuation standpoint, Walmart's forward 12-month price-to-earnings ratio stands at 43.7, higher than the industry’s 39.7. The company is trading at a premium to Target (with a forward 12-month P/E ratio of 15.9) while trading at a discount to Costco (46.72).
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The Zacks Consensus Estimate for Walmart’s current fiscal-year sales and earnings per share implies year-over-year growth of about 5% and 9.5%, respectively.
Walmart currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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This article originally published on Zacks Investment Research (zacks.com).