Walmart Inc. WMT is increasingly leveraging its scale in e-commerce and marketplace operations to build a larger advertising business, turning customer traffic and seller activity into a growing source of revenues.
The company’s first-quarter results highlighted strong momentum in retail media, with its global advertising business growing 37%. In the United States, advertising revenues increased 36%, while Walmart Connect delivered 44% growth, excluding VIZIO. The gains significantly outpaced overall company revenue growth, underscoring the expanding role of advertising within Walmart’s broader commerce ecosystem.
The strength reflects continued growth across Walmart’s digital platforms. U.S. e-commerce sales rose 26% during the quarter, while Marketplace sales jumped nearly 50%. As more third-party sellers use Walmart’s platform to reach shoppers, advertising is becoming an increasingly important tool for driving product visibility and customer engagement. Marketplace sellers increased advertising spending by more than 50% in the quarter, supporting the rapid growth of the business.
Advertising is also contributing to a more favorable business mix. Walmart noted that higher digital advertising activity helped support gross margin performance despite increased fuel-related costs. In Walmart U.S., gross profit increased 5.6%, while the gross profit rate expanded 29 basis points, aided by improvements in the business mix that included digital advertising.
The latest quarter reinforces that advertising is becoming a larger part of Walmart’s commerce ecosystem. Supported by strong marketplace growth, rising seller participation and continued digital engagement, the advertising business is emerging as a meaningful contributor to the company’s evolving mix of revenue-generating activities.
How Target and Kroger Are Expanding Retail Media Businesses
Target Corporation TGT continues to benefit from growth in its high-margin Roundel media business. In first-quarter fiscal 2026, the company reported nearly 60% growth in Target Plus gross merchandise value. TGT also noted that growth in high-margin revenue streams such as Roundel and Target Plus contributed to gross margin expansion during the quarter, highlighting the increasing importance of these businesses within the company’s digital ecosystem.
The Kroger Co. KR is also strengthening its retail media operations. The company’s alternative profit businesses, which include media, Kroger Personal Finance and Insights, generated $1.5 billion in operating profit in fiscal 2025. KR expects its media business to deliver double-digit growth in 2026, supported by the continued expansion of its e-commerce operations, which surpassed $16 billion in sales in fiscal 2025.
WMT Stock Price Performance, Valuation & Estimates
Shares of Walmart have risen 27.4% over the past year compared with the industry’s growth of 26.3%.
WMT Price Performance Versus Industry
Image Source: Zacks Investment Research
From a valuation standpoint, WMT trades at a forward price-to-earnings ratio of 39.98, higher than the industry’s average of 36.41.
WMT Valuation Compared to Industry
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for WMT’s current and next fiscal-year earnings per share implies year-over-year growth of 9.5% and 13.3%, respectively.
Walmart currently carries a Zacks Rank #3 (Hold). 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).