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At All-Time Highs, Will Walmart Stock Continue to Climb?
Walmart (WMT) stock soared to a new all-time high of $88.29 on Nov. 19, following an impressive third-quarter earnings report. The retail giant outpaced Wall Street's expectations and provided a bullish outlook for the fiscal year, setting the stage for further potential gains.
So far this year, Walmart stock has soared about 64%, significantly outperforming the broader market.
With this backdrop, let’s look at whether WMT stock has more room to grow.
Strong Q3 Performance: Beating Expectations
Walmart delivered adjusted earnings of $0.58 per share for the quarter ended in October, surpassing analysts’ estimate of $0.53. Total revenue climbed 5.5% year-over-year to $169.6 billion, exceeding projections of $167.7 billion. The company's better-than-expected performance reflects robust global e-commerce growth (up 27%), a 28% rise in advertising revenue, and a 22% increase in membership income.
This diversified growth model has enabled Walmart to grow profits faster than sales, demonstrating the strength of its evolving business strategy.
Each of Walmart’s core segments—Walmart U.S., Walmart International, and Sam’s Club—contributed meaningfully to the company’s growth story. Walmart U.S. posted a 5.3% increase in comparable sales, driven by higher transaction counts and unit volumes. Internationally, constant-currency sales grew by 12.4%, bolstered by strong performance in key markets such as Mexico and Canada. Sam’s Club recorded a 7% growth in comparable sales, thanks to new perks and technology-driven efficiencies.
Sam’s Club, in particular, has emerged as a key growth driver. Innovations like “Just Go” exit technology and express delivery services are enhancing the member experience and fueling e-commerce growth. The frictionless shopping experience—both in-store and online—positions Sam’s Club as a leader in the warehouse club segment.
The e-Commerce and Automation Advantage
E-commerce has been a key growth catalyst for Walmart, with the segment’s sales growing rapidly. Walmart’s success in e-commerce stems from strategic investments in delivery densification, expedited delivery options, and automation. The company has significantly lowered delivery costs per order by automating over 50% of its fulfillment center volume while improving service levels.
Notably, over 30% of Walmart’s e-commerce orders now come from customers who pay a convenience fee for expedited delivery. This willingness to pay underscores the value customers place on Walmart’s reliable and efficient delivery network, creating a lucrative revenue stream for the company.
Market Share Gains and Diversification
Walmart continues to capture market share across grocery and general merchandise, leveraging its everyday low-price strategy. Additionally, newer growth areas, such as advertising and membership fees, are bolstering its revenue and profitability.
Walmart's advertising business has grown into a formidable revenue generator, with Q3 ad sales increasing by 28%. Walmart Connect in the U.S. posted a 26% growth, while international advertising, led by Flipkart, saw even more impressive gains. This robust growth highlights the effectiveness of Walmart’s retail media platform, which enables brands to connect with shoppers in a highly targeted manner.
Membership programs, including Walmart+ and Sam’s Club, are another pillar of growth. Membership income grew by double digits in the U.S., while Sam’s Club memberships increased penetration among higher-tier members. Internationally, markets like China saw membership income rise by over 30%, further solidifying Walmart’s global footprint.
Momentum into the Holiday Season
With inventory levels optimized and markdowns reduced, Walmart is well-positioned for the crucial holiday shopping season. Its combination of broad assortment, competitive pricing, and enhanced customer experience—including technology-driven convenience features like Scan & Go—continues to resonate with consumers.
The retailer's focus on diversifying profit streams through advertising, memberships, and marketplace services has strengthened its business model. These durable revenue sources and operational efficiencies are expected to drive sustained growth and shareholder returns.
Final Takeaway
Walmart's current momentum suggests its stock has the potential to climb further. The retailer will also benefit from short-term catalysts, like optimism about holiday shopping. In the long term, Walmart’s value proposition, a wide range of products, convenience, focus on innovation, and operating efficiency sets it apart from the competition.
Wall Street analysts are also optimistic, with a “Strong Buy” consensus rating for Walmart stock.
On the date of publication, Sneha Nahata did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
