Earnings Call Insights: Walmart Inc. (WMT) Q3 2026
Management View
- Doug McMillon, President, CEO & Director, highlighted a strong quarter, stating “Sales grew 5.9% overall in constant currency, and adjusted operating income grew even faster at 8%.” He emphasized positive transaction counts, unit volumes, and market share gains in grocery and general merchandise, particularly with higher income households. E-commerce was noted as a highlight, up 27% globally, with all segments delivering growth above 20%. McMillon also announced, “Globally, advertising grew 53%, including VIZIO, and membership income was up 17%.” He discussed Walmart International’s 11.4% sales increase and 16.9% adjusted operating income growth, with e-commerce sales up 26%. The call also marked a significant leadership transition, with John Furner set to become CEO of Walmart Inc. on February 1, 2026.
- John Furner, Executive VP, CEO & President of Walmart US and Director, expressed optimism about the company’s strategic direction, stating “I believe we’re well positioned to fulfill our purpose.” He highlighted the value being delivered through price rollbacks, inventory management, and speed of digital order deliveries.
- John Rainey, Executive VP & CFO, reported, “Consolidated revenue in constant currency increased 6% or more than $10 billion, led by continued e-commerce momentum with 27% growth.” He noted that “the combination of advertising and membership fee income represented approximately 1/3 of our consolidated adjusted operating income.” Rainey also announced Walmart’s move to list on NASDAQ and commended the leadership transition.
Outlook
- John Rainey shared, “We’re raising our guidance for sales and operating income for the year. Full year sales in constant currency is expected to grow between 4.8% and 5.1%, up from 3.75% to 4.75% prior.” Fourth quarter constant currency sales guidance is for growth of 3.75% to 4.75%. Operating income is expected to grow 4.8% to 5.5% for the full year, with Q4 growth in the range of 8% to 11%. Adjusted EPS guidance for the full year is $2.58 to $2.63, with Q4 expected to be in the range of $0.67 to $0.72.
- Guidance was raised from the previous quarter, reflecting increased confidence in continued market share gains, especially in Q4.
Financial Results
- Adjusted operating income grew 8% in constant currency, with international operating income up nearly 17%. Adjusted EPS increased nearly 7% to $0.62. Year-to-date operating cash flow reached $27 billion, up $4.5 billion from last year. Year-to-date capital returns totaled nearly $13 billion through dividends and share repurchases.
- Gross profit was relatively flat year-over-year, as gains in Walmart U.S. were offset by pressure in the international segment and ongoing price investments in Mexico. Membership income increased 17%, led by 34% growth in international, and advertising income rose 53% globally.
Q&A
- Simeon Gutman, Morgan Stanley: Asked about agentic AI’s impact on e-commerce and holiday consumer behavior. Doug McMillon responded, “I’m really excited about what’s possible…our breadth of assortment being so close to people, which will help us with delivery speed and, of course, everyday low prices.” John Furner added, “We’re really excited about some of the new capabilities coming over the next few months as Sparky can take more action on behalf of our customers.”
- Gregory Melich, Evercore ISI: Inquired about Walmart+ membership growth. John Furner explained, “about 35% of our deliveries that are coming from our stores are sub 3 hours and our fastest growth channel is sub an hour, and that’s holding up and it’s growing at a fast pace,” also citing high NPS levels and credit card program uptake.
- Katharine McShane, Goldman Sachs: Asked about inflation and price elasticity. John Furner stated, “we are seeing inflation in the low 1% range…our inventory is in good shape…it allows flexibility and takes pressure off any end-of-season markdowns.”
- Seth Sigman, Barclays: Questioned operating leverage and tariffs. John Rainey highlighted, “Our shipping costs have been down consistently for many quarters in the 30% range. This was another quarter where we saw double-digit improvements.”
Sentiment Analysis
- Analysts focused on the sustainability of growth, impact of AI and technology, and the consistency of key metrics, with a neutral to slightly positive tone, highlighting some concerns about consumer behavior and operating leverage.
- Management’s tone was confident during prepared remarks and Q&A, repeatedly emphasizing operational discipline, innovation, and adaptability. Phrases such as “I’m really excited” and “we feel really good about this” reinforced a positive outlook, though there was acknowledgment of pockets of consumer moderation.
- Compared to the previous quarter, both management and analysts maintained a similar level of cautious optimism, with slightly more emphasis on technology and the leadership transition this quarter.
Quarter-over-Quarter Comparison
- Guidance for full year sales and operating income growth was raised compared to last quarter. E-commerce growth accelerated from 25% to 27% globally. International and membership income growth rates also increased quarter-over-quarter.
- Strategic focus shifted further towards AI-powered initiatives, automation, and leveraging data for personalized experiences. The leadership transition was a new focal point.
- Analysts continued to probe on consumer elasticity, inventory management, and the effects of tariffs, but also asked more about digital innovation and Walmart+.
- Management’s confidence remained high, with a continued focus on operational flexibility, technology investments, and disciplined capital allocation.
Risks and Concerns
- Maximum fair pricing legislation, effective January, is expected to impact the pharmacy business. John Rainey noted, “That will influence the comp in January a little bit, but all in, if you look at our revenue guidance, it’s very much in line with the first part of the year.”
- Merchandise category mix remains a headwind to gross margin, especially as health and wellness outpaces general merchandise.
- Pockets of consumer moderation were observed among low-income cohorts, though management expressed confidence in Walmart’s value proposition as a buffer.
Final Takeaway
Walmart management underscored robust sales and operating income growth, driven by strong e-commerce momentum, increased membership and advertising income, and disciplined cost control. The company raised its full year sales and operating income guidance, highlighting confidence in continued market share gains and innovation through AI and automation. The leadership transition to John Furner was positioned as seamless, with management reiterating a clear strategic path and adaptability to evolving market dynamics.