Walmart Sees Continued Comps Gains: Will Broad-Based Strength Support?
Walmart Inc. WMT continues to prove its retail dominance with another strong record in comparable sales. For the first quarter of fiscal 2026, Walmart U.S. reported comparable sales growth of 4.5%, excluding fuel, driven by transaction improvement of 1.6% and an average ticket increase of 2.8%, as well as strong e-commerce growth. The gains were broad-based, with notable momentum in food and consumables, wherein Walmart continues to gain market share. Health and wellness also surged with high-teens growth, thanks to strong prescription volumes and over-the-counter products.
Complementing the strong performance at Walmart U.S., Sam's Club U.S. posted a robust 6.7% increase in comparable sales, excluding fuel. The rise was primarily volume-driven, with strength in Member's Mark products.
Walmart's ability to deliver consistent comparable sales gains stems from its balanced omnichannel strategy, featuring faster delivery speeds, which includes a 91% year-over-year rise in sub-three-hour delivery, disciplined inventory management and aggressive price rollbacks. More than 5,000 items saw price reductions in the fiscal first quarter, enhancing Walmart's value proposition across key categories. The retailer also leaned on private label strength, with grocery private brand penetration up 60 basis points compared with the last year.
This performance demonstrates Walmart's agility and customer relevance amid economic and trade-related headwinds. As the company navigates tariff-related pressures, the replenishment-heavy model and deep supply-chain partnerships are helping it remain flexible, protect margins and support price leadership in a volatile cost environment.
How are WMT Rivals TGT & COST Approaching Comparable Sales?
While Walmart U.S. delivered comparable sales growth, two of its competitors, Target Corporation TGT and Costco Wholesale Corporation COST, offer an instructive contrast.
Target is pursuing long-term growth through digital expansion, marketplace scaling and store investments. Despite a 3.8% decline in comparable sales in the first quarter of fiscal 2025, Target continues to see strength in same-day services like Drive Up and Shipt. The company is also growing the Target Plus marketplace, positioning it for future comparable sales improvements through innovation and customer convenience.
Costco, by contrast, reported comparable sales growth of 5.7% in the third quarter of fiscal 2025, with U.S. comparable sales up 6.6%. Its brand name, geographical reach and curated product breadth continue to attract value-conscious shoppers. Costco's favorable product mix, steady store traffic and member-driven pricing model underpin solid comparable sales momentum.
WMT's Price Performance, Valuation & Estimates
Shares of Walmart have gained 9.7% in the past three months compared with the industry 's growth of 9.3%.
From a valuation standpoint, WMT trades at a forward price-to-earnings ratio of 34.8X, significantly up from the industry's average of 31.97X.
The Zacks Consensus Estimate for WMT's fiscal 2026 earnings implies year-over-year growth of 3.2%, whereas its fiscal 2027 earnings estimate indicates a year-over-year uptick of 11.6%.
WMT currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
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Target Corporation (TGT): Free Stock Analysis Report
Walmart Inc. (WMT): Free Stock Analysis Report
Costco Wholesale Corporation (COST): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
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