Walmart (NASDAQ:) is scheduled to report its fourth-quarter fiscal 2026 earnings on Feb. 19. The retail giant has been benefiting from steady traffic trends, robust omnichannel growth, improving merchandise mix, and rising contributions from membership and advertising. The key factors to watch in the quarter are how holiday demand, digital momentum and higher-margin income streams balance against tariff-related costs, category mix headwinds and ongoing expense pressures.
The Zacks Consensus Estimate for fourth-quarter revenues stands at almost $190 billion, indicating an increase of 5.2% from the same period last year. The consensus mark for earnings has remained unchanged in the past 30 days at 73 cents per share, calling for a 10.6% rise from the figure reported in the year-ago period.
Walmart has a trailing four-quarter average earnings surprise of 0.8%. In the last reported quarter, the company delivered an earnings surprise of 1.6%.
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What the Zacks Model Predicts for WMT’s Q4 Earnings
As investors prepare for WMT’s quarterly announcement, the question looms regarding earnings beat or miss. Our proven model predicts an earnings beat for Walmart this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is the case here.
Walmart has a Zacks Rank #3 and an Earnings ESP of +0.83% at present. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
What’s Shaping WMT’s Q4 Earnings?
Walmart’s fourth-quarter results are likely to reflect continued traffic growth and market share gains. Management previously noted strength in grocery and health & wellness, alongside improving trends in certain general merchandise categories. Ongoing price rollbacks and value-focused initiatives have supported Walmart’s competitive positioning, fueling unit growth and customer engagement across income cohorts. With the fourth quarter encompassing the company’s most significant seasonal sales period, merchandising execution, in-stock levels and pricing discipline are expected to play an important role.
E-commerce has been a key growth contributor. In the last reported quarter, global e-commerce sales increased 27%, driven by store-fulfilled pickup and delivery and marketplace expansion. The company also highlighted improving digital profitability through greater fulfillment automation, more efficient delivery networks and a higher mix of third-party marketplace sales. Continued progress in these areas is likely to support both sales momentum and margin performance during the peak demand period.
Higher-margin income streams, such as advertising revenue and membership income, have also been meaningful drivers, reflecting momentum across Walmart+, Sam’s Club and retail media. These businesses contribute considerably to operating income and could help offset mix pressure from grocery and consumables.
International operations are also likely to contribute, building on solid, constant-currency growth in markets such as China, Mexico and India. Strength in digital adoption and marketplace gains has supported results abroad, though currency fluctuations and event timing shifts may influence year-over-year comparisons.
At the same time, some cost pressures remain. Management has highlighted tariff-related costs, higher claims expenses and ongoing price investments. How well Walmart manages these costs alongside steady demand and digital growth will likely influence fourth-quarter profits.
WMT Stock Price Performance
Over the past year, Walmart stock has rallied 29% compared with the Zacks Retail – Supermarkets industry’s growth of 28.2% and the Zacks Retail – Wholesale sector’s decline of 2.4%. WMT also outpaced the ’s 13.9% rise during the same period.
In the said time frame, Walmart surpassed other retailers such as Kroger Company (NYSE:), Costco Wholesale (NASDAQ:) and Target (NYSE:). While Kroger shares have rallied 9.2% over the past year, Costco and Target have declined 3.9% and 11.1%, respectively.
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Walmart’s Valuation Picture
Walmart shares are currently trading at a forward 12-month price-to-earnings ratio of 45.31, above the industry’s average of 41.22. The premium reflects confidence in Walmart’s share gains, steady traffic and expanding higher-margin businesses, supported by improving digital operations. The elevated multiple leaves limited room for missteps, and any slowdown in comparable sales, margin pressure or softer consumer demand could weigh more heavily on the stock versus lower-valued peers.
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While Walmart is trading at a premium to Kroger and Target, its valuation stands below COST at present. KR trades at a P/E ratio of 13.43, TGT stands at 14.86, and COST trades at 48.38.
How Should Investors Approach WMT Stock Now?
Walmart enters the fourth quarter with steady traffic trends, expanding digital penetration, and growing higher-margin revenue streams that support its long-term growth profile. At the same time, ongoing cost pressures, mix headwinds from grocery, and a competitive promotional backdrop could temper margin expansion.
With consensus estimates reflecting solid year-over-year growth and the stock trading at a premium valuation, expectations appear balanced. While Walmart’s scale and defensive positioning provide stability, upside may depend on consistent execution.
This article originally published on Zacks Investment Research (zacks.com).
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