Walmart's strategic partnership in live commerce

Walmart has posted a strong financial performance for Q2 26, including robust revenue growth and a significant increase in profitability. Results were driven by strong store-fulfilled pickup and delivery, alongside growth in Sam's club China, supported by the opening of new clubs. In addition, the Walmart-TalkShopLive partnership strategically positions the company in live commerce, expanding its customer base and boosting engagement in collectibles.

Walmart Inc. is a major American retail company founded in 1962 by Sam Walton. With its Headquarters in Bentonville, Arkansas, it operates around 10,750 stores worldwide, including supermarkets, discount stores, while Sam's Club US is a membership-only club that operates 600 clubs in 44 states in the US and Puerto Rico, also operating samsclub.com. It has around 2.1 million employees worldwide.

The company is known for offering a wide range of products at low prices, both in stores and online. It serves millions of customers each week and continues to grow by investing in technology, improving delivery services, and expanding globally. All said, it aims to help people save money and live better. Walmart has three reportable segments – Walmart U.S (68% of FY 24-25 revenue), Walmart International (18%), and Sam’s club (14%).

Strong Q2 26 financial momentum

Walmart published record results for Q2 26 on August 29, 2025, with revenue up 4.8% y/y at $177.4bn, driven by store-fulfilled pickup & delivery. 30.1% y/y increase in China driven by continued strength in Sam’s Club. Opened 8 new clubs in the past 12 months, including 2 new clubs in the quarter in China. Membership & other income grew by 5.4% y/y driven by 15% global growth in membership fee income. However, operating income contracted by 1.9% y/y to 7.8bn. Net income increased by 56.1% y/y to $7bn.

Strategic partnership

Walmart and TalkShopLive are expanding their partnership to further enhance the Walmart Marketplace through a new weekly livestreaming series called “Collector’s Night,” debuting September 4, 2025. This exclusive series on Walmart Live, in collaboration with WeTheHobby, features live box breaks, surprise giveaways, and exclusive product drops, aiming to build a vibrant community for sports card and collectibles enthusiasts. The initiative leverages TalkShopLive’s platform, enabling viewers to make frictionless purchases directly from the livestream without leaving the show. Walmart’s move reflects its strong commitment to the fast-growing collectibles market and intent to redefine customer experiences, transforming Walmart into a true destination for collectors amid surging demand in this category.

Strong long-term performance

Walmart reported a strong financial performance over FY 22-25, posting a revenue CAGR of 5.9% reaching $680.9bn, driven by growth in transactions and unit volumes across both stores and eCommerce channels. EBIT rose at a CAGR of 4.1% to $29.3bn, with a margin of 4.3%. Net income increased at a CAGR of 12.4% to $19.4bn, with margin expanding from 2.4% in FY 22 to 2.9% in FY 25.

The company experienced an increase in CFO from $24.2bn in FY 22 to $36.4bn in FY 25. ROA rose from 6.5% in FY 22 to 7.1% in FY 25. In addition, the ROE also increased from 15.5% to 21.4%.

In comparison, Kroger Co, a local peer, reported revenue CAGR of 2.2%, reaching $147.1bn over FY 22-25. EBIT surged at a CAGR of 7.8% to $4.7bn, with margin expanding from 2.7% to 3.2% and net income increased at a CAGR of 17.2% to $2.7bn.

Positive views amongst analysts

Over the past 12 months, the company has delivered strong returns of approximately 31.2%. In comparison, Kroger Co. delivered a slighly lower return of 29.6%.

Walmart is currently trading at a P/E of 37.1x, based on the FY 26 estimated EPS of $2.7, which is higher than its 3-year historical average of 34.4x and that of Kroger Co (14.8x). In addition, the company is trading at an EV/EBIT of 27.8x, based on the FY 26 estimated EBIT of $30bn, which is higher than the 3-year average of 23x and that of Kroger Co (12.7x).

Walmart is covered by and liked by almost all 41 analysts, with 40 having “Buy” ratings, and one having “Hold” rating for an average target price of $112, implying upside potential of 11.4% from its current price.

Analysts’ views are further supported by an expected revenue CAGR of 4.6% over FY 25-28, reaching $772.1bn and EBIT CAGR of 8.1% to $37.1bn, with a margin of 4.8% in FY 28. In addition, analysts estimate a net profit CAGR of 9.4%, reaching $25.5bn, with EPS expected to increase to $3.2 in FY 28 from $2.4 in FY 25. Likewise, analysts estimate EBIT CAGR of 2.8% net profit CAGR of 8.1% for Kroger Co. over FY 25-28.

Overall, Walmart has demonstrated resilient performance, delivering consistent top-line and profit growth across segments, driven by its tech-powered omnichannel strategy and operational efficiency. Strategic investments in automation, e-commerce, and membership expansion, along with its evolving business model, Walmart positions to enhance customer experience, deepen market penetration, and sustain global leadership in retail.

The company faces risks including execution challenges in sustaining e-commerce growth amid rising logistics and tech costs, regulatory scrutiny in key markets, and intense competition. Economic uncertainty and shifting consumer spending may further pressure margins and hinder topline expansion.