10-K: Walmart Reports Strong Fiscal 2026 Revenue Growth Amid Strategic Investments

Walmart Inc. announced robust revenue growth for fiscal year 2026, driven by strong comparable sales and e-commerce expansion, while navigating increased operating expenses and ongoing legal challenges.

Summary

• Total revenues for fiscal 2026 increased by $32.2 billion, or 4.7%, to $713.2 billion, primarily due to a 4.7% increase in net sales to $706.4 billion.
• Consolidated net income attributable to Walmart rose to $21.9 billion in fiscal 2026, up from $19.4 billion in fiscal 2025, an increase of 12.9%.
• Diluted net income per common share attributable to Walmart (EPS) was $2.73 for fiscal 2026, compared to $2.41 in fiscal 2025.
• Walmart U.S. segment net sales grew 4.4% to $483.0 billion, with comparable sales increasing 4.3%, significantly boosted by a 4.3% contribution from eCommerce sales.
• Walmart International segment net sales increased 7.0% to $130.4 billion, with strong eCommerce growth of $6.3 billion, though operating income decreased by $0.4 billion due to a $0.7 billion charge related to PhonePe's share-based compensation.
• Sam's Club U.S. segment net sales increased 3.1% to $93.0 billion, with comparable sales up 2.9%, and eCommerce contributing 3.3% to comparable sales.
• The company's gross profit rate increased by 8 basis points to 24.2% in fiscal 2026, driven by disciplined inventory management and growth in higher-margin businesses.
• Operating expenses as a percentage of net sales increased by 20 basis points to 20.9% in fiscal 2026, mainly due to higher self-insured general liability claims expense and increased depreciation.
• Net cash provided by operating activities increased by $5.1 billion to $41.6 billion in fiscal 2026, and free cash flow rose to $14.9 billion from $12.7 billion in fiscal 2025.
• Capital expenditures increased to $26.6 billion in fiscal 2026, up from $23.8 billion in fiscal 2025, with a focus on technology, supply chain, and customer-facing initiatives.
• A new $30.0 billion share repurchase authorization was approved in February 2026, replacing the prior program, and the fiscal 2027 annual dividend was increased to $0.99 per share.
• Several executive leadership changes were announced, effective February 2026, including new Presidents and CEOs for Walmart U.S., Walmart International, and Sam's Club U.S.
• The company settled certain opioid-related claims for approximately $3.3 billion in fiscal 2023, which has been fully paid by January 31, 2025, but continues to vigorously defend against unsettled matters.
• A settlement was reached with the FTC and certain states regarding the Spark Driver platform, resulting in a $100 million judgment ($37 million accrued as of January 31, 2026).
• Walmart's common stock transitioned its primary listing from the New York Stock Exchange to the Nasdaq Global Select Market effective December 9, 2025.

Sentiment

Score: 7

Explanation: StockSavvy.ai views this as a generally positive report, reflecting solid revenue and net income growth, strong cash flow, and continued strategic investments. However, increased operating expenses and ongoing legal challenges introduce some caution, preventing a higher score.

Positives

• Total revenues increased by 4.7% to $713.2 billion in fiscal 2026, demonstrating continued top-line growth.
• Consolidated net income attributable to Walmart grew by 12.9% to $21.9 billion, indicating improved profitability.
• Diluted EPS increased to $2.73 in fiscal 2026 from $2.41 in fiscal 2025.
• Walmart U.S. comparable sales increased 4.3%, with eCommerce contributing significantly, reflecting strong customer engagement with omnichannel offerings.
• Walmart International achieved 7.0% net sales growth and substantial eCommerce growth of $6.3 billion.
• Sam's Club U.S. comparable sales increased 2.9%, with strong performance in grocery, health and wellness, and general merchandise, and robust eCommerce growth.
• Gross profit rate improved by 8 basis points, driven by disciplined inventory management and growth in higher-margin businesses.
• Net cash provided by operating activities increased by $5.1 billion to $41.6 billion, highlighting strong operational cash generation.
• Free cash flow increased to $14.9 billion, providing ample liquidity for strategic investments and shareholder returns.
• The Board approved a new $30.0 billion share repurchase authorization, signaling continued commitment to shareholder returns.
• The annual dividend for fiscal 2027 was increased to $0.99 per share, reflecting confidence in future performance.

Negatives

• Walmart International's operating income decreased by $0.4 billion, or 7.2%, in fiscal 2026, primarily due to a $0.7 billion non-cash charge related to PhonePe's share-based compensation.
• Walmart International's gross profit rate decreased by 49 basis points, attributed to ongoing channel and format mix shifts, and strategic growth investments in price and delivery capabilities.
• Operating expenses as a percentage of net sales increased by 20 basis points in fiscal 2026, mainly due to higher self-insured general liability claims expense of approximately $0.9 billion and increased depreciation.
• Sam's Club U.S. comparable sales were negatively impacted by 1.9% due to lower fuel sales, primarily from lower fuel prices.
• Return on Investment (ROI) slightly decreased to 15.1% in fiscal 2026 from 15.5% in fiscal 2025, primarily due to an increase in average invested capital from higher property and equipment purchases.

Risks

• Failure to successfully execute the omnichannel strategy and the cost of investments in eCommerce and technology may adversely affect market position, net sales, and financial performance.
• Inability to timely identify or effectively respond to consumer trends or preferences could negatively affect reputation, customer relationships, demand, market share, and business growth.
• Strong competition from other retailers, wholesale club operators, omnichannel retailers, and emerging shopping tools could materially adversely affect financial performance.
• General or macroeconomic factors, both domestically and internationally, such as inflation, interest rates, supply chain challenges, and changes in consumer spending, may adversely affect financial performance.
• Performance of strategic alliances and other business relationships may not generate anticipated sales or profitability.
• Global or regional health pandemics or epidemics could negatively impact business operations, demand, in-stock positions, costs, and financial performance.
• Natural disasters, climate change, geopolitical events, catastrophic events, and acts of violence could materially adversely affect operations and financial performance.
• Risks associated with suppliers, including political/economic instability, financial instability, failure to meet standards, raw material availability, and transportation disruptions, could adversely impact operations and financial performance.
• If the quality or safety of products sold in stores or online fails to meet expectations or regulatory standards, it could lead to customer loss, liability, and reputational damage.
• Potential direct liability, customer loss, and regulatory enforcement for poor quality or safety of products offered on third-party marketplaces.
• Disruptions in information and financial systems due to power outages, cyberattacks (including ransomware), or system failures could harm operations and lead to data loss or corruption.
• Failure of technology-based systems for online shopping and delivery to function effectively or keep pace with competitors could adversely affect operating results and omnichannel growth.
• Failure to maintain the privacy or security of information (company, customer, associate, business partner, vendor data) could damage reputation, result in litigation, fines, and substantial costs.
• Changes in third-party reimbursements and contracts, or the type/scope of health and wellness offerings, could adversely affect overall results.
• Failure to attract and retain qualified associates, increases in wage and benefit costs, changes in labor laws, and other labor issues could materially adversely affect financial performance.
• Illegal or inappropriate activity of independent contractors or third-party service providers could expose the company to liability and adversely affect business and reputation.
• Failure to meet market expectations for financial performance could adversely affect the market price and volatility of stock.
• Fluctuations in foreign exchange rates may materially adversely affect financial performance and reported results of operations.
• International operations are subject to legislative, judicial, accounting, legal, regulatory, tax, political, and economic risks specific to the countries or regions of operation.
• Changes in tax and trade laws, regulations, and interpretations (e.g., tariffs, OECD Global Minimum Tax) could materially adversely affect financial performance.
• Failure to comply with other laws, regulations, and interpretations specific to businesses and jurisdictions could materially adversely affect reputation, market position, or financial performance.
• Litigation claims and other legal proceedings (e.g., opioid-related, antitrust, driver platform, environmental) may materially adversely affect results of operations, financial position, and liquidity.
• The exclusive forum provision in bylaws could increase costs or limit shareholders' ability to obtain a favorable judicial forum for disputes.
• Not satisfying stakeholder expectations with respect to social and environmental efforts could adversely affect reputation or subject the company to regulatory or litigation risk.

Future Outlook

The company projects capital expenditures for fiscal year 2027 to be approximately $25 billion to $27 billion, with a continued focus on technology, supply chain, and customer-facing initiatives. Management expects continued uncertainty in the global economy due to factors like tariffs, inflation, currency fluctuations, and supply chain pressures, and anticipates the dynamic tariff environment to persist in fiscal 2027.

Management Comments

• Our strategy is to make every day easier for busy families, operate with discipline, sharpen our culture and become more digital, and make trust a competitive advantage.
• Making life easier for busy families includes our commitment to price leadership, which has been and will remain a cornerstone of our business, as well as increasing convenience to save our customers time.
• By leading on price, we earn the trust of our customers every day by providing a broad assortment of quality merchandise and services at everyday low prices ('EDLP').
• EDLC is our commitment to control expenses so our cost savings can be passed along to our customers.
• We expect continued uncertainty in our business and the global economy due to factors such as tariffs and trade restrictions, inflationary trends, fluctuations in global currencies, and supply chain pressures.
• We are committed to helping customers save money and live better through everyday low prices, supported by everyday low costs.
• Our objective of prioritizing growth means we will focus on serving customers and members however they want to shop through our omnichannel business model.
• Our objective of prioritizing margin focuses on growth with a focus on incremental margin accretion through a combination of productivity improvements as well as category and business mix.
• As we execute our financial framework, we believe our return on capital will improve over time.

Industry Context

StockSavvy.ai notes that Walmart's continued investment in omnichannel capabilities, AI, and supply chain automation aligns with broader retail industry trends emphasizing digital transformation and integrated customer experiences. The focus on membership models (Walmart+, Sam's Club) and expansion into higher-margin areas like digital advertising and financial services reflects a strategic pivot seen across large retailers seeking to diversify revenue streams and enhance customer loyalty in a highly competitive landscape. The company's performance, particularly in eCommerce growth, indicates its ability to adapt to evolving consumer behaviors, while increased operating expenses due to claims and depreciation are common challenges for large-scale physical and digital operations.

Comparison to Industry Standards

• Walmart's 4.7% total revenue growth in fiscal 2026 is competitive within the large-cap retail sector, particularly given its scale, and compares favorably to some traditional brick-and-mortar retailers struggling with digital transitions.
• The 4.3% comparable sales increase for Walmart U.S., with a significant eCommerce contribution, demonstrates strong performance relative to many peers who may see slower growth in physical store traffic.
• The slight decrease in ROI to 15.1% in fiscal 2026, while still robust, suggests that the substantial capital investments in technology and infrastructure are impacting short-term efficiency metrics, a common trade-off for long-term strategic growth seen in companies like Amazon or Target investing heavily in logistics and digital platforms.
• The increase in operating expenses due to self-insured general liability claims and depreciation reflects challenges faced by large retailers with extensive physical footprints and complex supply chains, similar to issues observed in other major retail chains with broad geographic coverage.
• The strategic shift towards higher-margin businesses like digital advertising and financial services mirrors efforts by other retail giants, such as Amazon's advertising segment, to leverage their customer data and ecosystem for diversified revenue streams.

Management Changes

Corporate Governance

Legal Proceedings

• Opioid-Related Litigation: Approximately 230 cases in MDL No. 2804 and 13 other cases pending in U.S. and Canadian courts. A $3.3 billion liability accrued in fiscal 2023 for certain settlements has been fully paid by January 31, 2025. The company continues to vigorously defend unsettled matters.
• DOJ Opioid Civil Litigation: U.S. Department of Justice filed a civil complaint on December 22, 2020, alleging unlawful dispensing and distribution of controlled substances. The court granted partial dismissal of DOJ's claims on March 11, 2024, with trial scheduled for November 2027.
• False Claims Act Litigation: A qui tam action filed on August 23, 2019, partially unsealed on April 30, 2024, alleging violations of the Controlled Substances Act and state pharmacy regulations. A renewed motion to dismiss is pending.
• ASDA Equal Value Claims: Approximately 73,000 current and former Asda store employees in the UK are alleging equal value claims. The company has an indemnification obligation up to a contractually determined amount. A hearing on the third phase is scheduled for November 23, 2026.
• Money Transfer Agent Services Matter: Ongoing grand jury subpoenas from the U.S. Attorney's Office for the Middle District of Pennsylvania regarding consumer fraud prevention and anti-money laundering compliance. The company intends to vigorously defend.
• Federal Trade Commission and State Attorneys General Driver Platform Litigation: A settlement was reached on March 3, 2026, for a $100 million judgment ($37 million accrued as of January 31, 2026) related to payment and operational practices of the Spark Driver platform. Discussions with other state representatives are ongoing.
• Mexico Antitrust Matter: COFECE initiated a quasi-judicial administrative process on October 6, 2023, against Walmex's subsidiary. A split decision on December 12, 2024, imposed a $93.4 million pesos (approx. $5 million USD) monetary penalty and non-structural conduct measures. Walmex's subsidiary appealed on January 6, 2025.
• Foreign Direct Investment Matters (India): The Directorate of Enforcement in India issued a show cause notice in July 2021 and requests in April 2025 to Flipkart regarding alleged violations of Foreign Direct Investment rules and regulations from 2009 to 2015. The company intends to defend against the allegations.
• India Antitrust Matter: The Competition Commission of India ordered an investigation on January 13, 2020, into Flipkart subsidiaries. A non-confidential investigation report was received on September 13, 2024, alleging competition law violations.
• Environmental Matters: A Finding of Violation from the U.S. Environmental Protection Agency in October 2023 for Clean Air Act violations related to refrigeration leak detection and repair, with potential penalties exceeding $1 million.

Related Party Transactions

• The company has a redeemable noncontrolling interest in a subsidiary within the Walmart U.S. segment, where the minority interest owner holds a put option to require the company to purchase underlying shares at fair value beginning in December 2027.
• During fiscal 2024, the company paid $3.5 billion to acquire shares from certain Flipkart noncontrolling interest holders and settled a $0.9 billion liability to former noncontrolling interest holders of PhonePe.
• During fiscal 2024, the company received $0.7 billion related to new rounds of equity funding for its majority-owned PhonePe subsidiary.

Stakeholder Impact

• Shareholders: Benefit from increased dividends ($0.99/share for fiscal 2027) and a new $30.0 billion share repurchase authorization, indicating continued capital returns. However, increased operating expenses and ongoing legal risks could impact future profitability and stock performance.
• Customers: Benefit from continued investments in omnichannel experiences, price leadership (EDLP), and expanded service offerings, including faster delivery options and AI-powered tools. Potential negative impact from product quality/safety issues or data breaches.
• Associates: Benefit from investments in workforce strategy, growth, and development, including AI learning pathways and competitive wages/benefits. Management changes may create new opportunities or shifts in leadership.
• Suppliers: Subject to standards of conduct and potential impact from supply chain disruptions, trade policies, and economic instability. The Mexico Antitrust Matter highlights regulatory scrutiny on supplier negotiations.
• Creditors: The company's strong commercial paper and long-term debt ratings (S&P: AA, Moody's: Aa2, Fitch: AA) indicate a favorable credit profile, but increased debt levels and potential legal liabilities are factors to monitor.

Next Steps

• The company projects capital expenditures of approximately $25 billion to $27 billion for fiscal 2027, focusing on technology, supply chain, and customer-facing initiatives.
• The fiscal 2027 annual dividend of $0.99 per share will be paid in four quarterly installments on April 6, 2026, May 26, 2026, September 8, 2026, and January 4, 2027.
• The new $30.0 billion share repurchase authorization, approved in February 2026, will guide future share repurchase activities.
• The company will continue to vigorously defend against unsettled opioid-related litigation, with a trial scheduled for November 2027 in the DOJ Opioid Civil Litigation.
• The hearing on the third phase of the ASDA Equal Value Claims is scheduled to begin on November 23, 2026.
• Walmex's subsidiary has challenged COFECE's resolution in the Mexico Antitrust Matter through an appeal in specialized federal courts.
• The company will continue to respond to requests for information from the Directorate of Enforcement in India regarding Foreign Direct Investment rules and regulations concerning Flipkart.
• The company is cooperating with the EPA in its investigation regarding Clean Air Act violations related to refrigeration leak detection.

Key Dates

Recommendation

Walmart's fiscal 2026 results show solid revenue growth and improved net income, driven by strong comparable sales and e-commerce expansion. The company's commitment to shareholder returns through increased dividends and a substantial new share repurchase program is positive. However, the increase in operating expenses due to higher general liability claims and depreciation, coupled with a slight dip in ROI, suggests some margin pressure. The ongoing legal proceedings, particularly the opioid and antitrust matters, represent significant contingent liabilities and potential reputational risks. While the strategic investments in omnichannel and AI are promising for long-term growth, the immediate financial impact and the dynamic macroeconomic environment warrant a 'hold' recommendation, as the positives are balanced by these operational and legal headwinds.

Keywords

Walmart, WMT, Retail, Omnichannel, eCommerce, Financial Results, Fiscal 2026, Earnings, Net Sales, Operating Income, EPS, Capital Expenditures, Share Repurchase, Dividends, Supply Chain, AI, Cybersecurity, Legal Proceedings, Opioid Litigation, Antitrust, Management Changes, Corporate Governance, Nasdaq Listing, Sam's Club, Walmart International, PhonePe, VIZIO