Walmart's Operating Income Grows Significantly Faster Than Revenue
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Mar 07 2026
0mins
Source: NASDAQ.COM
- Income Growth Comparison: Walmart's operating income surged 10.8% year-over-year in the latest fiscal quarter, significantly outpacing its 5.6% revenue growth, indicating robust business momentum, particularly in high-margin advertising and membership income.
- Strong E-commerce Sales: Walmart's global e-commerce sales increased by 24% year-over-year, now accounting for 23% of total net sales, which not only enhances customer responsiveness but also strengthens the company's position in the highly competitive retail market.
- BJ's Membership Income Growth: BJ's membership fee income rose by 10.9% to $129.8 million, and despite a decline in merchandise gross margin due to product mix changes, a 31% increase in digital sales demonstrates its market potential.
- Long-term Investment Value: Although BJ's has a lower valuation, Walmart shows greater long-term investment resilience due to its higher profit margins and diversified revenue streams, especially in rapidly growing high-margin business areas.
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Analyst Views on WMT
Wall Street analysts forecast WMT stock price to fall
26 Analyst Rating
25 Buy
1 Hold
0 Sell
Strong Buy
Current: 127.500
Low
119.00
Averages
125.75
High
136.00
Current: 127.500
Low
119.00
Averages
125.75
High
136.00
About WMT
Walmart Inc. is a technology-powered omnichannel retailer. The Company is engaged in the operation of retail and wholesale stores and clubs, as well as eCommerce Websites and mobile applications, located throughout the United States (U.S.), Africa, Canada, Central America, Chile, China, India and Mexico. It operates in three reportable segments: Walmart U.S., Walmart International and Sam's Club U.S. The Walmart U.S. segment includes the Company's mass merchandising concept in the U.S., as well as eCommerce, which includes omni-channel initiatives and certain other business offerings such as advertising services. The Walmart International segment consists of the Company's operations outside of the U.S. through its subsidiaries, as well as eCommerce and omni-channel initiatives. The Sam's Club U.S. segment includes the warehouse membership clubs in the U.S., as well as samsclub.com and omni-channel initiatives.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Enhanced Customer Experience: The renovations will include wider aisles, modern signage, new digital touchpoints, and improved parking and landscaping, with interactive displays allowing customers to visualize products in their homes.
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See More
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- Strong Commercial Loan Growth: Bank of America reported over 12% growth in commercial loans, while Wells Fargo's commercial loans surged by 16.4%, highlighting companies' strategies to secure cheaper financing amid uncertain policy conditions.
- Stable Consumer Borrowing: While some banks reported flat or declining consumer loans, overall consumer borrowing balances grew steadily, reflecting resilience in consumer spending, particularly driven by wealthier households.
- Cautious Economic Outlook: Economists caution that prolonged war and persistent inflation could weigh on borrowing, although current financial health of businesses and consumers remains strong, with upcoming quarterly reports expected to provide clearer insights into consumer spending trends.
See More
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- New Delivery Model: Walmart is testing a strategy of storing third-party marketplace products in-store back rooms to accelerate delivery speeds, allowing for same-day delivery on some orders, enhancing customer experience and competitiveness against Amazon.
- Market Pilot: The pilot is underway in several Dallas-area stores, leveraging Walmart's extensive store network as e-commerce delivery hubs, with over one-third of online orders arriving within three hours, showcasing its logistical advantages.
- Supply Chain Upgrades: Recent automation in warehouse operations has freed up space for the new initiative, allowing merchandise to arrive at stores pre-sorted, further optimizing inventory management and delivery efficiency.
- AI Utilization: Walmart employs artificial intelligence to analyze local demand and determine which marketplace products should be stocked in each store, thereby increasing inventory turnover and driving marketplace revenue growth of approximately 20% annually.
See More
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See More
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- Procter & Gamble's Stable Demand: Procter & Gamble experienced only a 3.3% revenue dip during the 2009 recession and reported growth in every quarter during the pandemic in 2020 and 2021, highlighting the essential nature of its products in any economic climate.
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See More
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- Diversified Revenue Sources: Walmart's global advertising operations generated $6.4 billion in revenue in fiscal 2026, providing additional support for shareholder returns beyond its core retail business, further solidifying its market position.
- Pricing Power Advantage: With 270 million customers visiting weekly, Walmart can exert pricing pressure on suppliers, maintaining low prices and high margins, ensuring profitability even amid tariff and inflationary pressures.
- Membership Driving Sales: The Walmart+ membership service not only generates direct revenue but also increases shopping cart totals, enhancing customer loyalty and is expected to further drive future revenue growth and dividend payment capacity.
See More
