Walmart Q4 FY2026 Earnings

What They Actually Said

Company: Walmart · WMT Quarter: Q4 FY2026 Published: 2026-02-20 Read time: 11 min

Walmart just posted its final quarter of fiscal year 2026, and the headline numbers were strong. Revenue hit $190.7 billion, adjusted earnings beat expectations, and eCommerce grew 24% globally. But the real story is what's happening underneath: Walmart is quietly turning itself into a tech company that also sells groceries. Advertising, marketplace, membership, AI — the business is changing fast.

Here's what happened.

The Numbers: A Narrow Beat on Earnings, a Bigger Story in the Details

Total Revenue: $190.7 billion, up 5.6% year-over-year (4.9% in constant currency)
Net Sales: $188.9 billion
Adjusted EPS: $0.74 vs. $0.73 expected
GAAP EPS: $0.53 (down from $0.65 a year ago — more on that below)
Operating Income: $8.7 billion, up 10.8% year-over-year
Net Income: $4.24 billion (down from $5.25 billion a year ago)
Full-Year Revenue: $713.2 billion, up 4.7%
Free Cash Flow (Full Year): $14.9 billion, up $2.3 billion

Translation: Walmart beat earnings expectations by a penny, which sounds small, but on a company this size even a cent of EPS represents hundreds of millions of dollars. The adjusted EPS of $0.74 strips out things like investment gains and losses that don't reflect how the actual retail business performed. That's why adjusted EPS went up 12% while GAAP EPS went down — the underlying business is doing well, but one-time investment losses dragged down the official number.

Wait — Why Did Net Income Drop?

If the business is doing well, why did net income fall from $5.25 billion to $4.24 billion? The answer is a line item called "other gains and losses," which swung from a $294 million loss last year to a $2.1 billion loss this quarter. This is mostly unrealised losses on Walmart's equity investments — stakes in companies whose value dropped on paper, not actual cash going out the door.

Translation: "Unrealised losses" means the investments Walmart holds (like its stakes in other companies) went down in value on paper, but Walmart hasn't sold them. Think of it like your house losing value in a downturn — you haven't actually lost money unless you sell. Accounting rules require companies to report these paper losses as if they were real, which can make a perfectly healthy quarter look worse than it is.

Walmart U.S.: The Core Is Solid

Walmart U.S. generated $129.2 billion in net sales, up 4.6%. Comp sales (excluding fuel) also grew 4.6%, with customer transactions up 2.6% and average ticket up 2.0%.

The most impressive number: eCommerce sales in the U.S. grew 27%, and sales through store-fulfilled delivery channels — where you order online and a local store handles the delivery — grew more than 50%. That's eight consecutive quarters of eCommerce growth above 20%.

Operating income for the U.S. segment hit $7.0 billion, up 6.6%, with gross margin improving by 17 basis points. Operating expenses grew slower than sales, which is exactly what you want to see.

Translation: "Comp sales" (comparable sales) measure how much revenue grew at stores that have been open for at least a year. It strips out new store openings so you can see whether existing stores are getting busier. A 4.6% comp is strong for a retailer the size of Walmart — it means people are both visiting more often and spending slightly more per trip.

Translation: A "basis point" is one hundredth of a percentage point. So 17 basis points means gross margin improved by 0.17%. That sounds tiny, but when you apply it to nearly $130 billion in sales, it adds up to hundreds of millions in extra profit.

The New Revenue Engines: Advertising, Marketplace, and Membership

This is where Walmart's transformation story gets interesting. The company's global advertising business hit $6.4 billion for the full fiscal year, up 46%. Walmart Connect — the U.S. advertising platform — grew 41% in Q4 alone.

Membership fee revenue grew 15.1% globally. Walmart+ in the U.S. saw double-digit fee growth. Sam's Club membership hit record levels.

These are high-margin revenue streams. When Walmart sells you a TV, it makes a thin margin. When it charges a brand to advertise on its website or app, that revenue drops almost entirely to the bottom line. Same with membership fees.

Translation: "High-margin revenue" means money that comes in with very little cost attached. If Walmart makes 2-3% profit on a grocery sale but 50-70% profit on an ad sale, growing the advertising business from $4.4 billion to $6.4 billion in one year creates a disproportionate boost to overall profitability. This is the same playbook Amazon uses — and it's why both companies are investing so aggressively in these areas.

International: China and Mexico Drive Growth

Walmart International posted $35.9 billion in net sales, up 11.5% on a reported basis and 7.5% in constant currency. Growth was led by China, Walmex (Mexico), and Flipkart (India).

Adjusted operating income grew 26.5% in constant currency, with lower eCommerce losses and improved business mix contributing to the improvement.

One note: Flipkart's "Big Billion Days" sale event fell mostly in Q3 this year vs. Q4 last year, so Q4 international comparisons look slightly worse than the underlying trend.

Translation: "Constant currency" removes the effect of exchange rate movements. Because Walmart reports in U.S. dollars, when the dollar strengthens, international revenue looks lower even if the local businesses are growing. The 7.5% constant-currency growth is the better measure of how these businesses are actually performing.

The Guidance Problem: Strong Quarter, Cautious Outlook

Walmart guided FY2027 adjusted EPS of $2.75 to $2.85. Wall Street had been expecting something closer to $2.86-$2.90. The company also guided net sales growth of 3.5% to 4.5% and adjusted operating income growth of 6.0% to 8.0%, both in constant currency.

For Q1 specifically, Walmart expects adjusted EPS of $0.63 to $0.65, which is in line with expectations.

CFO John David Rainey acknowledged the "highly dynamic operating conditions" the retail industry is experiencing, including tariff uncertainty and inflation pressure on lower-income consumers.

Translation: "Highly dynamic operating conditions" is corporate speak for uncertainty and chaos. Walmart is saying: we don't know what tariffs will do to our costs, we're not sure how long consumers can keep spending, and the rules of the game might change. When a company this size hedges its language that carefully, it's telling you to pay attention.

Translation: "Guidance" is a company's own forecast for future performance. When guidance comes in below what analysts expected, it usually signals that management sees potential headwinds ahead — even if the current quarter was strong. In this case, Walmart's management is being cautious about tariffs, consumer spending, and how much they'll need to invest in the business. Investors often react more to guidance than to the quarter that just happened, because guidance is about the future.

Competition: Amazon Just Passed Walmart on Revenue

Amazon just overtook Walmart as the largest company by annual revenue for the first time. Amazon reported $716.9 billion in sales for its calendar year 2025, compared to Walmart's $713.2 billion for fiscal 2026. The comparison isn't perfect — Amazon counts cloud computing and tech services in that figure, while Walmart is almost entirely retail. But it's a useful reminder that the competitive landscape is shifting, and it partly explains why Walmart is investing so aggressively in eCommerce, advertising, and technology.

The Bottom Line for Investors

Walmart delivered another solid quarter, beating estimates on both revenue and earnings while growing operating income faster than sales. The business model is changing. eCommerce isn't just growing — it's now profitable, and making more money with each new order. Meanwhile, advertising revenue is approaching $6.4 billion and membership income continues to climb. These newer businesses carry much higher profit margins than selling groceries, which is quietly reshaping Walmart's financial profile. Under new CEO John Furner, Walmart also announced a new $30 billion share repurchase programme and raised its annual dividend to $0.99 per share.

↑ Why This Matters (Bull Case)

The bull case is that Walmart is becoming a fundamentally different business. Advertising, marketplace commissions, and membership fees are growing at 30-40% annually and carry much higher margins than retail sales. eCommerce is now profitable and accelerating. The company is gaining market share across all income brackets — including higher-income households trading down — which gives it pricing power and leverage with suppliers. Capital expenditure of $26.6 billion ($3.5 billion more than last year) is being deployed into automation and fulfilment infrastructure that should continue to improve efficiency. If these high-margin revenue streams keep growing at this pace, Walmart's overall profitability could expand meaningfully even with modest top-line growth.

↓ Why This Might Worry You (Bear Case)

The bear case is that the FY2027 guidance tells you management is worried. Adjusted EPS of $2.75-$2.85 came in below consensus, suggesting Walmart expects tougher conditions ahead — whether from tariff costs, a slowing consumer, or continued heavy investment. Net income already fell 19% this quarter on GAAP basis, partly from investment losses but also from rising operating expenses. The company is spending $26.6 billion a year in capital expenditure, and that number is growing — which squeezes free cash flow even as the business generates more cash. Amazon has now overtaken Walmart in annual revenue, and competition in eCommerce and advertising is intensifying. At a market cap above $1 trillion, the good news may already be reflected in the valuation.

The question is whether Walmart's new revenue streams — advertising, marketplace, membership — can grow fast enough to justify the massive investments being made, or whether the cautious guidance is a sign that the easy gains are behind it.

References

Walmart Investor Relations — Q4 FY2026 Earnings Press Release (February 19, 2026)
CNBC — Walmart Tops Fourth-Quarter Earnings and Revenue Estimates (February 19, 2026)
The Motley Fool — Walmart Q4 2026 Earnings Call Transcript (February 19, 2026)

Ticker: WMT (NASDAQ) · Reported: February 19, 2026

Walmart Q4 FY2026 Earnings: Retail Giant Beats, But Guidance Disappoints