> ## Content Index > Fetch the complete content index at: https://brief.sharpertrades.com/llms.txt > Use this file to discover other available public pages before exploring further. # Walmart’s Digital Growth Expands as Slower Store Sales and Higher Costs Test Its Premium Valuation - URL: https://brief.sharpertrades.com/walmarts-digital-growth-expands-as-slower-store-sales-and-higher-costs-test-its-premium-valuation/ - Published: 2026-09-15T17:31:00.000Z - Updated: 2026-09-15T19:33:31.000Z - Description: Walmart is expanding e-commerce, advertising, membership and marketplace revenue even as U.S. comparable sales growth slows. Stronger profitability and new digital initiatives are being weighed against rising costs, heavier capital spending and a premium valuation. - Author: Luca Moschini - Tags: Business Trends, Earnings, Innovation & Tech ### Walmart’s Business Mix Is Moving Beyond Traditional Retail Walmart (WMT) is increasingly turning its massive retail footprint into a broader digital platform. Second-quarter global e-commerce sales rose 23%, U.S. marketplace sales jumped 52%, global advertising increased 38% and membership fee revenue climbed 17%. That growth comes with a more complicated backdrop for WMT stock. U.S. comparable sales growth slowed to 2.6%, operating costs and capital spending increased, and the shares remain below their pre-earnings level following their worst one-day decline in nearly five years. Meanwhile, Walmart continues expanding its marketplace, restaurant delivery, fashion and other businesses designed to capture more customer spending. --- ### Key Points - Walmart’s digital businesses continue to outgrow its core sales, with global e-commerce up 23%, U.S. marketplace sales up 52%, advertising up 38% and membership fee revenue up 17% in the second quarter. - Profitability improved faster than sales, with adjusted operating income rising 17.4% at constant currency and adjusted EPS increasing 19.1%, but operating expenses, fuel costs and capital spending are also rising. - Walmart continues broadening its ecosystem through marketplace products, restaurant delivery, fashion and beauty, while its premium earnings multiple raises expectations for continued execution. --- ## Digital Businesses Become a Bigger Part of Walmart’s Growth Story Walmart's second-quarter results showed a widening gap between the growth rates of its traditional retail operations and newer digital revenue streams. Global e-commerce sales increased 23%, while U.S. marketplace sales surged 52%. Global advertising rose 38%, and membership fee revenue increased 17%. Those businesses broaden Walmart's revenue mix beyond merchandise sold through its stores. The marketplace expansion is continuing. Walmart.com recently added ADT (ADT) Blu self-installed home security products, allowing customers to purchase DIY security systems without a long-term contract or technician visit. Walmart is also expanding distribution of RocketSports-1 women's activewear through its website and selected stores. The marketplace model increases Walmart's product assortment through third-party sellers. It also creates opportunities for marketplace fees and advertising revenue as more brands and products enter Walmart's digital ecosystem. Restaurant delivery is another area of expansion. Walmart recently added Dunkin' through a collaboration with Inspire Brands, initially using 150 in-store locations with plans to expand to the majority of Dunkin's 10,000 locations outside Walmart stores nationwide. Reports also identified Papa John's (PZZA) as Walmart's latest restaurant-delivery deal. Walmart is simultaneously working to expand its position in fashion and beauty. D.A. Davidson analyst Michael Baker said comparable sales in those categories have been running in the mid-single-digit range for much of the past several years as the retailer uses initiatives such as temporary pop-up stores to broaden its customer base and increase share of wallet. ## Why Has WMT Stock Struggled Despite Stronger Earnings? The tension surrounding Walmart is visible in its latest financial results. Revenue in the most recently reported quarter reached $187.94 billion, up 5.9% year over year, while adjusted EPS increased 19.1% to $0.81\. Adjusted operating income rose 17.4% at constant currency to $9.25 billion, substantially faster than the 5% constant-currency increase in net sales. Gross margin also improved. Walmart's consolidated gross profit rate increased 96 basis points to 25.4%, helped primarily by tariff refunds at Walmart U.S. and a favorable contribution from global advertising. At the same time, U.S. comparable sales growth slowed to 2.6%, from 4.1% in the previous quarter and 4.6% a year earlier. Walmart's third-quarter outlook also came in below expectations, while mandated lower drug prices affected revenue from its large pharmacy operation. The combination contributed to Walmart's worst single-day stock decline in nearly five years following its Aug. 20 earnings report. The shares fell nearly 10% that day and remained more than 7% below their pre-earnings level as of Sept. 9\. Over the more recent one-month period, WMT shares were down 4.6%, compared with a 2% decline for the Zacks S&P 500 composite. Earnings expectations have also moved somewhat lower. The consensus estimate for the current quarter is $0.63 per share, up 1.6% year over year, but that estimate declined 6.2% over the preceding 30 days. Full-year consensus EPS stands at $2.87, representing 8.7% expected growth, while the next fiscal year's $3.22 estimate represents 12.3% growth. ## Can Walmart’s Higher-Margin Growth Offset Rising Costs? Walmart's expanding digital businesses are developing alongside higher expenses and investment. Adjusted operating expenses increased 40 basis points to 21.4% of net sales during the second quarter, reflecting higher liability claims, depreciation and U.S. healthcare costs. Management also expects more than $2 billion in incremental fuel-related costs during fiscal 2027. Capital spending is rising as well. First-half capital expenditures increased to $14.2 billion from $11.4 billion. Operating cash flow rose $1.4 billion to $19.7 billion, but free cash flow declined $1.4 billion to $5.5 billion as capital expenditures increased by $2.8 billion. Walmart raised its fiscal 2027 capital-spending guidance to approximately 4% of net sales. Those investments are occurring while the stock carries a premium valuation. WMT was recently valued at 34.7 times forward 12-month earnings, above its sub-industry multiple of 31.7 times and its own five-year median of 25 times. The comparison highlights why execution across marketplace, advertising, membership and e-commerce matters. These faster-growing operations are becoming more significant to Walmart's business mix at the same time that fulfillment, last-mile delivery and other operating costs remain important factors in digital profitability. Walmart's restaurant-delivery expansion adds another element to that strategy. Customers can increasingly use Walmart's app and website for purchases extending beyond the company's traditional store assortment, including restaurant meals and third-party marketplace products. The company is also confronting costs elsewhere in its business. Walmart and roughly 1,000 other merchants are opposing a proposed Visa (V) and Mastercard (MA) credit-card fee settlement, arguing that it offers insufficient relief while providing the card networks with overly broad protections. A hearing on final approval is scheduled for Nov. 16. --- ## What It Means for Investors Walmart's current business picture combines slower growth in an important traditional retail metric with faster expansion across digital and ancillary businesses. U.S. comparable sales growth has cooled, but e-commerce, marketplace, advertising and membership revenue are expanding considerably faster. Profitability also improved faster than sales during the second quarter, with adjusted operating income up 17.4% at constant currency and adjusted EPS up 19.1%. The counterweight is cost. Operating expenses increased as a percentage of sales, capital expenditures rose sharply, free cash flow declined and Walmart expects more than $2 billion of incremental fuel-related costs during fiscal 2027. Valuation adds another dimension. Walmart continues to trade above both its sub-industry forward earnings multiple and its own five-year median, even after the post-earnings decline. That places greater attention on whether the company's faster-growing digital operations can continue expanding alongside its core retail business while profitability absorbs increased investment and operating costs. Future disclosures on marketplace, Walmart Connect advertising, e-commerce fulfillment costs and membership revenue can provide additional evidence on how that shift in Walmart's business mix is developing. ## Conclusion Walmart's latest numbers show a retailer increasingly generating growth from businesses that extend beyond traditional merchandise sales. Global e-commerce grew 23%, the U.S. marketplace expanded 52%, advertising increased 38% and membership fees rose 17% in the second quarter. Walmart is reinforcing that expansion through new marketplace products, restaurant delivery partnerships and efforts to broaden its presence in categories such as fashion and beauty. At the same time, U.S. comparable sales growth has slowed, expenses and capital investment are rising, and free cash flow declined during the first half. Those mixed signals help explain why stronger earnings have not translated into stronger recent WMT stock performance. The central business development is therefore not simply Walmart's sales growth. It is the changing composition of that growth as digital commerce, advertising, marketplace fees, memberships and other services become increasingly important alongside the company's enormous traditional retail operation. --- ## FAQs ### Why has Walmart stock been under pressure? Walmart stock fell sharply after its fiscal second-quarter report as U.S. comparable sales growth slowed to 2.6%, its third-quarter outlook came in below expectations and investors weighed higher costs against the company's stronger earnings and digital growth. ### How fast are Walmart's digital businesses growing? In the second quarter, Walmart reported 23% growth in global e-commerce sales, 52% growth in U.S. marketplace sales, 38% growth in global advertising and 17% growth in membership fee revenue. ### Did Walmart's earnings improve in the latest quarter? Yes. Adjusted EPS increased 19.1% to $0.81, while adjusted operating income rose 17.4% at constant currency to $9.25 billion. Revenue increased 5.9% year over year to $187.94 billion. ### What new businesses is Walmart expanding? Walmart is expanding its third-party online marketplace, restaurant delivery, advertising and membership businesses. Recent initiatives include ADT Blu home security products, RocketSports-1 activewear and restaurant delivery involving Dunkin' and Papa John's. ### What cost pressures is Walmart facing? Walmart reported higher liability claims, depreciation and U.S. healthcare costs, while management expects more than $2 billion in incremental fuel-related costs in fiscal 2027\. First-half capital spending also increased to $14.2 billion, contributing to lower free cash flow. *This article was created with AI assistance and reviewed by an editor. For details, please refer to our* [*Terms of Use*](https://sharpertrades.com/p/terms?ref=brief.sharpertrades.com)*.* --- ### Go Beyond the Market Brief with Market Edge Follow SharperTrades’ complete approach to trading and investing, combining active trade opportunities through Block Orders, long-term research through Stock Investor, and structured market education through the Swing Trading Masterclass.[*Try Market Edge for $19 your first month →*](https://sharpertrades.com/p/market-edge?coupon%5Fcode=MB19&ref=brief.sharpertrades.com) ### Explore Research with Stock Investor [*Stock Investor*](https://sharpertrades.com/p/stock-investor/?ref=brief.sharpertrades.com) is SharperTrades’ platform for long-term investing research and portfolio management. Members receive research reports, portfolio updates, conviction tracking, and in-depth analysis designed to support disciplined investment decisions. ### Explore Active Trading & Income Strategies [*Block Orders*](https://sharpertrades.com/p/block-orders?coupon%5Fcode=MB1&ref=brief.sharpertrades.com) tracks institutional activity and highlights active trade setups and price behavior across long and short opportunities. For options-focused traders, [*Essential Option Income*](https://sharpertrades.com/p/option-alert-trading-signal?coupon%5Fcode=MB1&ref=brief.sharpertrades.com) provides a structured approach to options income strategies, while [*Pro Option Trader*](https://sharpertrades.com/p/pro-option-alert-trading-signal?coupon%5Fcode=MB19&ref=brief.sharpertrades.com) offers a broader range of options strategies and trade opportunities. ### Think More Clearly with SteadyCapital [SteadyCapital](https://studio.com/luca/steadycapital?c=fVDR9OI2&ref=brief.sharpertrades.com) is SharperTrades’ decision-support system for long-term investors, built around the SteadyCapital Method™. Review investment ideas, challenge assumptions, evaluate valuation and risk, compare companies, and think through important buy, hold, add, trim, or sell decisions before you act. ### Risk Disclosure All content is provided for educational purposes only and does not constitute investment advice. Trading involves risk, and past performance is not indicative of future results. Please review our full [Risk Disclosure](https://sharpertrades.com/p/risk-disclaimer?ref=brief.sharpertrades.com) for additional information.