Walmart Inc (WMT) — Q4 2026 Earnings Call Transcript

Joining me today from our home office in Bentonville are CEO, John Furner and CFO, John David Rainey. We'll begin with highlights of the fourth quarter and full year. Then we'll open the line for your questions. During the question and answer portion, we've invited segment leadership to join. Dave Gagina from Walmart US, Chris Nicholas from Walmart International, and Latrice Watkins from Sam's Club US. So we can address as many of your questions as possible, please limit yourself to one question. For additional detail on our results, including highlights by segment, please see our earnings release. And supplemental presentation on our website. Today's call is being recorded and management may make forward looking statements. These statements are subject to risks and uncertainties that could cause actual results to differ materially from these statements. These risks and uncertainties include but are not limited to, the factors identified in our filings with the SEC. Please review our press release and slide presentation for a cautionary statement regarding forward looking statements. As well as our entire Safe Harbor statement and non GAAP reconciliations on our website at investors.walmart.com. That concludes my introduction. John, over to you.

I'd like to start by saying thank you to our associates around the world in helping us deliver another year of strong growth. Across markets, our teams continue to demonstrate the power of an omnichannel model. Since the year began, I've visited great stores and clubs in the US, Canada, and Mexico. The automation of our supply chain is on track. We're gaining market share. And we have momentum in growth areas like marketplace, advertising, and membership. Looking at our results for the quarter, revenue was up 4.9% in constant currency, including growth in e-commerce of 24%. Adjusted operating income grew even faster at 10.5%. All three segments grew profits faster than sales for the quarter. And we're doing a great job of managing inventory, that's so important in running our business day to day. We ended the quarter with inventory up 2.6% or about half the rate of sales growth. Sales were strong across each segment of the business. This includes sales of general merchandise, which grew on a global base and was up low single digits for Walmart US led by fashion. Fashion was a bright spot for us both in-store and online. Driving a healthier mix of sales growth in our business is important to the strategy overall so I'm pleased with the trends we're seeing. Across our customer base, spending continues to be resilient. In the US, we see the customer as choiceful in their spending. Again, this quarter, the majority of our share gains came from households making more than $100,000. For households earning below $50,000, we continue to see that wallets are stretched. In some cases, people are managing spending paycheck to paycheck. That said, even these households are emphasizing convenience nearly as much as price. Stepping back, when I look at the enterprise today, it's a portfolio of businesses anchored in growth. Especially our digital channels, with an emphasis on having inventory close to the customer to maximize our delivery speed. Our associates have made this vision a reality and I couldn't be prouder of them. They've been open to change, learn new skills, and they pushed us to keep the customer and the member at the center of everything we do. Ultimately, what matters is how we show up for our customers and members. Did we serve their needs better today than we did yesterday? If so, we did our job. And how we approach getting better every day is what's important to me. We do that by living our purpose and values. That won't change. Our mission to help people save money and live better is as true today as it's ever been. It guides the strategy we've outlined, and that strategy is clear. We're executing on it at a high level. This includes the allocation of capital, which remains consistent with how we've described it as a percentage of sales. We look at capital spending through the lens of return on investment. Every dollar we spend has to compete for the highest return. Walmart Inc. is widely known for value on a broad assortment of items and for being a company that people trust. Thanks to how we leverage our assets for a truly omnichannel experience, we're now known for ultra-fast delivery times and providing convenience. The investments we've made in technology and supply chain help us deliver items even faster. They're paying off. Here in the US, customers using fast delivery, that's delivery in under three hours, grew more than 60% for the year. We know that customers and members from around the world are more alike than they are different. They love great quality products, value for their money, and more often, they're turning to Walmart Inc. for speed of delivery on a broad assortment. And being people led and tech powered helps our associates to find better ways to serve customers and members with our growing assortment, faster delivery speeds, and experiences they love. The way we're using technology and AI is helping us create great customer solutions, reduce friction, simplify decision making, and pinpoint where our inventory is, all while maintaining the trust we've earned from our customers and members. And we aren't just embracing the tools that are changing the way people shop. We're creating them. We're enhancing our shopping assistant like Sparky and building new experiences with partners like OpenAI and Alphabet. That are shaping the future of Agentic commerce. Looking more closely at Sparky, we're seeing good momentum. Customer engagement is up, and the customers who use Sparky have an average order value that's about 35% higher than non-Sparky customers. And I love how Sparky perfectly fits within our omnichannel strategy. It connects digital intent to fulfillment through forward deployed inventory and 1,500,000 associates here in The US. When Sparky builds a basket, we execute it through fast delivery, pickup, or in-store, turning AI engagement into immediate physical outcomes. As we expand Sparky across experiences like voice, and through services, we expect continued acceleration in customer adoption and the impact on commerce. We've started with Sparky here in The US, but we know that winning in a connected world means we need to deliver consistent experiences across markets. To do that, we need to focus on technology platforms that are built for a global business. The idea of building once and scaling globally makes us faster, lowers cost, and ensures consistency. We'll use AI to layer on top of existing platforms getting better leverage out of the assets we already own. This platform-centric approach helps us scale innovation consistently and reduce capital intensity. As I close, I'll say the pace of change in retail is accelerating. It's exciting. For Walmart Inc., the future is fast, convenient, and personalized. I'm challenging our teams to move even faster as the opportunities with AI become broader and deeper. I feel great about our future. Over the past several weeks, I've talked with associates in Mexico, Canada, and across a number of cities here in The US, and I love what I'm seeing. The enthusiasm, the passion, the execution, all the things that make Walmart Inc. a great place to shop and a great place to build a career have been on display. I'm so grateful for the opportunity to lead a business that has momentum built on a strong foundation and with a deeply experienced leadership team. I'm excited about what's to come and the plans we have to grow the business as we look ahead. And, John David, I'll turn it over to you.

I also want to thank all of our associates for helping us deliver these results. If there's one thing I want you to take away from this call, it's that our teams are executing well, and our business model is delivering strong growth and incremental profits. Even in the context of the highly dynamic operating conditions we and the rest of the retail industry are experiencing. We finished the year strong with a quarter of broad-based share gains continued e-commerce momentum, and adjusted operating income growing at 10.5% in constant currency, which is over twice the rate of sales growth. The advantages of our omnichannel model and diversified profit streams are increasingly clear. For the full year, we grew the top line by approximately 5% in constant currency, adding $35 billion in revenue. Sales exceeded $700 billion for the first time. We grew adjusted operating income 5.4%, even with a 300 basis point headwind from increased claims expenses and navigating a bumpy tariff environment. This was the third consecutive year that we grew profits at a faster rate than sales growth. We're playing offense by reinforcing our customer and member value proposition, evolving our model, and delivering on our financial framework. Our strategy is working, and we're excited about the opportunities ahead. For the fourth quarter, consolidated revenue in constant currency increased nearly 5%. With Walmart US comp sales up 4.6%. E-commerce sales were strong across markets, with growth up 24%. We're using our unique assets, stores and clubs, DCs and FCs, and last mile delivery networks to get orders to customers faster and more efficiently. Removal of friction from the experience accelerates our sales momentum. In Walmart US, e-commerce sales grew 27%, with 35% of store-fulfilled orders delivered in under three hours. In China, e-commerce grew 28% and represented more than 50% of the sales mix in that market. Flipkart is delivering orders in less than fifteen minutes across more than 30 cities in India. Sam's Club US doubled their growth in club-fulfilled delivery sales. The increase in fourth quarter operating income was led by more than 26% growth in international, reflecting improved e-commerce economics as well as lapping last year's strategic investments, and nearly 7% growth in Walmart US. Several factors contributed to our operating profit growth. First, business mix. As e-commerce drives the majority of our sales growth, we're improving e-commerce economics with increased contributions from business mix, most notably in higher margin areas like advertising and membership fees. Our advertising businesses globally increased 37%, including an acceleration in Walmart Connect in The US, up 41%. Importantly, we lapped the acquisition of Visio in December, so their performance will now be in our base. Consolidated membership income increased more than 15%, reflecting strength in Sam's Club in China which grew over 35%. In The US, Walmart Plus membership income was strong, up double digits, as our core offering and newer benefits, like our One Pay Cash Rewards credit card, continue to resonate with members. Sam's Club US membership income grew more than 6% as members gravitate toward the omnichannel capabilities Sam's offers. Notably, the combination of advertising income and membership fees represented nearly one-third of our operating income this quarter. Second is inventory management. Inventory increased 2.6% in constant currency, or approximately half the rate of sales growth for the full year. With our growing third-party marketplace, we can better balance owned and third party assortment, minimize markdowns, and improve our working capital. Inventory efficiency is also enabled by the technology, AI, and automation in our stores, clubs, and supply chain. In Walmart US, approximately 60% of stores are receiving some freight from automated distribution, and approximately 50% of e-commerce fulfillment center volume is automated. This enables better visibility into what inventory we own and inventory we can access and also improved our labor productivity. We're increasingly leveraging stores, with their proximity to customers, as digital fulfillment nodes to move inventory faster and more efficiently than ever before. When you simplify our model, inventory and labor are our two largest costs. Technology-enabled productivity benefits are critical to our ability to grow our core omni-business at lower marginal cost. We're extending these platform benefits from Walmart US to Sam's Club US, and we're at the early stages of deploying automation across our supply chain in select international markets. And third, merchandise category mix. This is an exciting one to call out as it's been many years in the making, particularly in Walmart US. As we lean into lower prices through rollbacks in EDLP and grocery categories, we're helping customers unlock purchasing power for general merchandise. We've worked hard to mitigate grocery inflation, as tariff-related costs lifted prices across many categories. We're seeing share gains in GM and in fashion. We've had several quarters in a row of mid single-digit sales growth. Importantly, the strategies that drove our results throughout FY '26 are consistent with what we expect to support our financial framework in FY '27. First, we have strong momentum across our businesses, most notably in digital. E-commerce sales grew nearly 25% this year and exceeded $150 billion for the first time, with Q4 representing 23% of sales mix. This is up 550 basis points from just two years ago. This sets us up uniquely well to serve customers however they want to shop with us, particularly as they adopt Agentic Commerce solutions. Second, we've demonstrated the durability of our model, especially in complex operating conditions. We're realizing the benefits of our diversified growth-oriented global portfolio. This has enabled us to grow underlying profits meaningfully faster than sales for each of the past three years. Our advertising businesses globally were up 46% this year to $6.4 billion, and membership fees exceeded $4.3 billion. Many of these initiatives are early in their maturity curve. We have a combination of profit drivers, including automation-related inventory and labor productivity, favorable business mix, and continued expense discipline to support continued investment and to drive faster operating income growth. Third, to orient us to move faster at lower cost, we're now aligned globally to leverage common platforms in tech, AI, and digital businesses. We believe this will result in our growth continuing to come at a much lower marginal cost than what it has historically. Now I'll discuss guidance. Full year constant currency sales are expected to grow between 3.5 - 4.5%. Operating income is expected to grow between 6 - 8%, with EPS in the range of $2.75 to $2.85. Sales guidance reflects a continuation of underlying business drivers and share gains. It considers our efforts to mitigate food price inflation and the headwinds on sales growth from maximum fair pricing legislation in pharmacy. We expect e-commerce will continue to be the primary driver of growth, with modest increases from store and club sales across the enterprise. Operating income guidance reflects a higher level of confidence relative to prior year's original guidance that we can deliver growth in the upper half of the range depicted in our framework. Our goal is to outperform this guidance, but we believe it's prudent to start the year with a level of conservatism given the backdrop is still somewhat unstable. We're assuming continued margin expansion driven by favorable business mix, automation benefits, and productivity, and fewer headwinds from merchandise category mix. The business continues to generate strong cash flow, with operating cash flow of $42 billion and growth in free cash flow of 18% in FY 2026. This provides flexibility to reinvest in the business while at the same time returning significant capital to shareholders. Given our confidence in the ability to continue to generate strong cash flows, and consistency in our multiyear capital investment plans, our board authorized a $30 billion share repurchase program, our largest to date. For FY '27, we expect capital expenditure levels to be approximately three and a half percent of sales. We're hitting the peak of annual spending levels on supply chain automation and store remodels. We're moving quickly on these projects as we see benefits to customer experience, business performance, and financial returns from these investments. Investments in AI are incorporated into our assumptions for capital spending. As you've seen from the announcements we've made, we're approaching AI development through partnerships. This lets tech companies do what they do best, develop innovative technology. It provides us clarity to do what we do best: translate the best of tech to retail experiences that create value for our customers, members, and our enterprise. In Q1, we expect constant currency growth in sales of 3.5% to 4.5% and operating income of 4% to 6%, with EPS of $0.63 to $0.65. Q1 operating income growth is expected to be lower than any other quarter in FY '27, due in part to timing of expenses and the year-over-year tariff impacts that started in last year's second quarter. Importantly, our first half results are expected to be in the range of our full year guidance. Recall also that we guide on a constant currency basis. If current exchange rates were to stay where they are now, we would expect an approximate 150 basis point benefit to reported sales growth and an approximate 200 basis point benefit to operating income growth in Q1. For the full year, we would expect an approximate 70 basis point benefit to sales and an approximate 120 basis point benefit to operating income. With that, we're ready to take your questions. Thank you.

Hey, good morning, everyone. Hey, John. I want to ask you about Agentic Commerce. You mentioned it's rapidly reshaping e-commerce as we speak. I realize a lot is still to be determined. I want to ask how you're thinking about first customer traffic flows and loyalty related to Agentic, and second, advertising and monetization.

Yeah. Good morning, Simeon. Thanks for the question. First, I just want to say thanks to our associates for a great quarter. They've been executing at a very consistent level with a clear strategy that's omnichannel. As it relates to your question, Agentic is definitely a part of the omnichannel strategy. Our omnichannel strategy, what we've been saying for a long time and building to is the ability to deliver what customers want, when they want it, and how they want it. The flexibility that we've built on the backside of this, which includes our fulfillment centers, our distribution centers, our stores, and forward deployed inventory, are all parts of the solution to deliver. What Agentic is doing for us, and we can talk about this in a couple of ways, But I'll talk about Sparky first with our own agentic agent. Sparky is going to be and is vastly becoming as it learns new skills a way that we can understand customer intent better than when they've been able to understand it before, generate solutions for them, and then deliver with speed. You heard earlier that our fast delivery was up 60% year on year. Walmart's getting faster. Sam's Club is getting faster. We're able to scale these platforms to international markets. Our ability to understand consumer customer intent, generate solutions, and deliver quickly is really exciting. It's been the quarter what we saw is that customers who engage with Sparky, we saw an average order value, I should say, about 35% higher than the customers who weren't using it. What's also exciting is we had a really high number of customers who are now engaging with Sparky quarter over quarter, but a lot to come here. Agentic AI will be great for our associates because it helps them focus on the things that are most important. And, Dave, do you want to add anything on Sparky in the quarter?

Absolutely. Thanks, John. And good morning, Simeon.

As John noted, AI is increasingly embedded across Walmart. It's strengthening our operations. It's improving associate productivity. It's enhancing the customer experience. That's really coming to life with Sparky. Sparky is essentially helping us evolve from traditional search to intent-driven commerce. As John noted, we're seeing strong engagement, roughly half of our app users have used Sparky. When they use Sparky, it drives them to build bigger baskets. John mentioned the 35% higher average order value. What that's telling us is that it's helping customers convert with greater confidence. I want to note that it is still early in this space, and we're continuing to add capabilities, more personalization, deeper contextual understanding. We're building execution capabilities, and I'm excited about the future for Sparky. From an economic standpoint, better discovery and higher conversion translates into bigger baskets and greater frequency. Simply put, Sparky is helping customers find the things they need, they want, and they love, strengthening our digital unit economics as it scales.

So Simeon, the second part of your question then, you asked about advertising as well. We had a really good quarter in advertising, up 37% around the world, while Walmart Connect in The United States was up 41%, which is a very strong quarter. How this will work with Agentic Commerce, I think we're all learning as we go, and we'll figure that out. What we do know, and what's clearly happened in the quarter, is our ability to connect suppliers and sellers with groups of customers who are interested in their products is working, and our capability to do that is getting stronger.

Good morning. Thank you so much for taking my question. Last year was obviously marked by a number of unanticipated costs that impacted Walmart's profitability, such as tariffs, the liability expense, and others. How did you factor that there could be other unknowns into your outlook this year? What could those be? And if they do not occur, how would you frame or quantify the potential upside of reinvestment? And along those lines, how would you quantify the degree that you've embedded in your outlook for this year? Thank you.

Let me give a little bit of context to our full year guidance, which I think will speak to your question. If you rewind and look back over the last three years prior to this one, we've effectively increased our guidance, if you adjust for the Visio acquisition, each of those three years. Each of those years, we've outperformed that guidance. In some cases, with operating income by several hundred basis points. In fact, if you were to adjust for claims being somewhat anomalous last year, we would have the same performance in this most recent year. So as we sit here one month into this new fiscal year, very much like in past years, we're taking a measured approach with the outlook. There's nothing that we've seen among consumer behavior or KPIs, macroeconomic KPIs, that would make us any more cautious than what we have been, but I think it's prudent to be somewhat balanced. We are overall constructive on the economy, but there are certainly indicators out there, whether it be a hiring recession or maybe subdued consumer sentiment, student loan delinquencies, and things like that make you want to be more balanced as you sit here at this point in time. We want to maintain maximum flexibility as we sit here at this point in the year. It's no different than the posture that we took in prior years. The guidance we've given, which at the upper end of operating income is 8% on a currency-neutral basis, over 9% on a reported basis. We're excited about it. We see the momentum in our business. Each year has gotten better than the last, and we've outperformed that. We would certainly expect to do that this year as well, but given that we are as large as we are and so tied to consumer health and the economy, we want to maintain maximum flexibility and not get out ahead of ourselves at this point in the year.

Hi, thanks. I wanted to get a little deeper into disinflation. I think it was up a little over 1% this quarter and maybe that was down a little bit sequentially. Can you just help us understand in your guide what you're expecting from inflation or particularly inflation especially with drug prices coming down?

Sure, Greg. This is John David again. I'm happy to take that. The most recent quarter, we had like-for-like inflation that was trending a little bit above 1%. That breaks down into food inflation being a little bit less than that, GM inflation being a little bit more than that. That's generally what our outlook is for the next quarter and the balance of the year. There are some pressures. You mentioned one. The maximum fair pricing, legislation around drugs we expect to contribute to about a 100 basis point headwind for the full year. Within the most recent quarter, having only one month of that is about 30 basis points. The health and wellness business continues to do really well and have strong comps, but that's a headwind that it will face for the year. Generally speaking, we would expect the price levels to somewhat be in the range that they are right now. We're excited about some of the commentaries that we've heard from suppliers focusing on lower prices, but that plays to our value proposition. Everyday low prices is what we stand for. We've seen as we've leaned into these lower prices that consumers have responded, and we've continued to gain share among all income demographics, I might point out. Notably probably skewed more towards the higher income demographic but we're gonna continue to play offense.

Good morning. Thanks for taking our question. I wondered if you could focus on your outlook for gross margin for 2026. Can you maybe talk to what you're expecting to be that contribution from mix? And also, can you go into a little bit more detail about the inventory management enhancements you need? Is it all from automation, or are there other initiatives here? And how does this get going across the regions?

Hey, Kate. It's John. Let me start by discussing inventory, and then I'll hand it over to John David for comments on the mix. Regarding inventory, there are several factors that have allowed us to manage it effectively. I'm really proud of the team, which has navigated significant uncertainty over the past twelve months and even longer, managing inventory at half the rate of sales growth, which is quite impressive. We're utilizing various technologies today compared to previous years to enhance our inventory management. Automation plays a significant role in this, as many of our locations are receiving most of their goods from automated facilities. We have a few thousand sites implementing some form of automation, and we expect this to increase throughout the year. A few of our regional distribution centers have replaced their old conveyor belt systems that had been in use for about twenty years, with some facilities even operating for thirty years. The conversion process is ongoing, and we're pleased with the capital investments and returns we're observing. We believe the peak for these supply chain investments will be this year and next year. In addition to automation, our associates—over a million in the U.S. alone—are equipped with handheld devices using computer vision to track our inventory. This allows us to know exactly what we have and where it is, ensuring it is available when customers place orders, shop at the counter, or request pickup. The entire team has worked hard to implement a comprehensive system that has brought us to our current position. Furthermore, the team has excelled at managing seasonal inventory purchases. Fashion sales have been stronger, and our sell-through rates have improved. We've performed well in recent quarters, especially during the holiday season. If I had to critique ourselves, I might say we were a bit conservative in certain categories for the fourth quarter. We had a strong overall performance in general merchandise and fashion, but in some areas, we could have been more aggressive with our purchases. The good news is that as we move into this first quarter, we have momentum, and I feel we're positioned well in terms of our product mix. Now, I'll pass it to John David to discuss the overall business mix.

Before I discuss the upcoming year, I want to highlight some improvements we experienced in the fourth quarter. Many of the enhancements in our supply chain that John mentioned have led to benefits such as reduced fresh throwaways, improved inventory management, and fewer markdowns. We noticed these advantages in the fourth quarter and anticipate they will continue into next year. When examining the profit and loss, we expect gross profit to rise next year, along with some leverage in selling, general and administrative expenses. It’s worth noting that we achieved leverage in SG&A for the fourth quarter, which hasn't happened in some time, and we are very pleased with this progress. We are seeing the results of our supply chain automation and productivity improvements reflected in our financial performance. In terms of business mix, we expect gross profit to improve further next year. As mentioned, a significant portion of our profit in the latest quarter came from advertising and membership income, and we are optimistic about continuing to see those benefits. Additionally, our fulfillment services and marketplace segments are performing well, contributing to the positive economic outlook for the coming year.

So a follow-up question on that. Can you talk about the progression of marketplace growth and fulfillment services? How are you expecting the profitability of this alternate profit pool to progress from last year? And then as we look forward over the next couple of years, there’s a lot of hope that The US Consumer will benefit from significant tax stimulus this year. Your stores tend to be on the leading edge because you see those consumers cashing those checks. Curious if you've seen anything so far and how those funds are being spent. Thanks so much.

Chris, I'll start with that, and others may want to jump in after my comments. Marketplace, I would characterize as an area of ongoing investment. We haven't talked about when we expect that by itself to achieve profitability. This is something that as you think about the two legs of growth or profitability, we want to lean a lot more into growth right now. We think that's what's best for our business. If you look at the most recent quarter, there are many categories, cook and dine, fashion, home decor, that all grew north of 40% on our marketplace. That's exactly what we want to see. We don't want to overly fixate on one aspect of our ecosystem of services that we provide to try to achieve profitability there. We think investment is the best opportunity. Walmart Fulfillment Services today has 52% of our sellers taking advantage of that. I've said this before, Chris, but I think if you're selling on Walmart and not using Walmart Fulfillment Services, you're almost using us in the wrong way. It is too good of a service. We continue to see that penetration increase and continue to see the teams perform in that area for our sellers. Those would be a couple areas that I think we would highlight for the coming year. As it pertains to the increase in tax refunds, we certainly have some of that in our guidance. We have to make assumptions about how much of that will be saved versus spent. Of what is spent, how much goes into the first quarter versus later quarters in the year. You know, it remains to be seen. You are correct to suggest that we tend to be very levered to that. When we see those move up or down, it impacts our business. Our guidance does assume an increase in tax refunds this year.

E-commerce profitability has been really encouraging and impressive. What do you see ahead in terms of how the business model continues to evolve and densification? And as we think more broadly about retail on the topic of personalization and moving from predictive to prescriptive with the aid of AI, what are your thoughts for what will happen with personalization, particularly as you see so much interaction with Sparky and have a lot of veracity, volume, and velocity of data. Thank you.

Hey, Oliver. Great question. What John David was just alluding to are many parts of what we've built to try to serve customers any way they want to be served, where they want to be served, how they want to be served. That's really the center of what we'd call the omnichannel strategy. This would include our stores, our e-commerce business that's pure fulfillment. We have our stores that are delivering. We have a mix of all the above. It’s designed for channel flexibility. What we've been saying for a few years is that channel flexibility has been, and again in this quarter, has helped us meet new customers, serve new customers and grow with customers that we haven't been transacting with in the past. So it's really encouraging. All these pieces have to work together for us to have results like we had in the quarter. So the best way to say it is if you look at Walmart on the top line, and you look at Walmart on the bottom line, those are where I would encourage you to hold us accountable because we have a great team here with a lot of experience that can manage the pieces in the middle, ultimately driving it faster delivery speeds and more intuitive experiences so that customers trust us to be a great place for a great assortment and great prices delivered the way they want it. What we're seeing with Sparky, again, it's early days, with Agentic Commerce being live on the site, but the quarter was encouraging. We had a lot of growth from Q4 over Q3. A lot of engagement. Dave mentioned earlier about half of our customers engaged with Sparky. When they engage with Sparky, we see better order value. We had a 27% growth rate in e-commerce in the fourth quarter, which is a big quarter for Walmart US, 24% globally. Sparky is only live in The US, but we have hope and ambition that quickly we can expand these platforms into other markets, and I think that will be accretive in those markets. Sparky can understand really clearly what it is that you're trying to accomplish in your life, whether that's a birthday party or camping trip or planning meals for the week or just planning dinner for this evening, and then we can generate great, unique solutions in real time if we need to. Or by knowing you a bit better than we did in the past, we can help suggest things are more in line with your personal preferences. All this put together we believe is a great way for customers to build trust that Walmart will save them time while shopping, save them time in the transaction but also save them time in delivery. A large number of our orders are happening in less than half an hour. We're averaging under an hour. Our express delivery when customers choose that. We mentioned earlier that fast delivery, which is under three hours, grew 60% year on year. We’re confident in the strategy. We like the assets that we have in place. Continue to invest our capital in a disciplined way, providing returns but ultimately driving great customer experiences over the long term.

Good morning, and congrats to the promotions across the segment leaders as well. Wanted to talk a little bit about advertising. $6.4 billion now. I was wondering if you could share with us just any color on what kind of growth you are planning for here. It’s been very strong. Should we expect that to moderate a little bit? I know The US really accelerated this quarter too, and maybe you can talk a little bit about what drove that? What are the types of advertisers or categories that are accelerating there? And where do you feel you're still kind of under-penetrated or over-penetrated? Just trying to think about where that could go from here.

Kelly, this is John David. I'll make an attempt at that. In terms of what to expect on advertising, you're right in terms of what you're implying. You get to a law of large numbers where it gets more challenging to enjoy those same growth rates. But in terms of overall progress that we're making with advertising, I really don't see that slowing down. Some of the areas that we've really expanded are areas like our marketplace business where we're seeing more of the growth come from that part of the business versus some of the first-party brands. The other thing I'll point out is the Visio acquisition. We saw triple-digit growth in advertising with our Visio business in the quarter. This is exciting because it gives us yet another channel to market to our customers. I feel like that's really just getting started. Obviously, the base isn't as large as our overall US business, but it has a lot of runway. As we've talked about in the past, and I know you're very familiar with, Kelly, if you measure us advertising as a percent of the addressable market or our GMV, we still have a long way to go here to get in the neighborhood of some of the best-in-class competitors. We feel like we can improve our advertising capabilities while doing it on a growing base, which gives us a lot of runway into the future.

Kelly, you mentioned the team. I'm really proud of the promotions here. At Walmart. Dave Gagina, who spent most of his career in ecommerce and logistics, Chris in businesses all around the world, and Latrice Watkins, twenty-seven years, the majority of that in merchandising. They're going to do a great job. They have a lot of experience. There was a structure change that we made in January, which is important. I think that signals confidence that the capabilities we've built in The US are exportable to other markets, and we can work with our other markets to accelerate these platforms to grow. That change was set to layer included the marketplace, Visio, advertisements, data services, and Walmart Plus being moved from inside Walmart US to an enterprise role where we can build once and build these platforms once and scale them globally. We're optimistic that what Seth has done here in The US with his team can accelerate growth in other markets additionally. This is a big business that's growing, and our share is relatively low compared to what it could be in terms of the addressable market. We're really excited about the opportunity for Seth and his team to work across the entire enterprise.

Great. Thanks, and good morning. I wanted to ask about stores versus e-commerce, and how you expect store comps to trend going forward? And what the impact to margins will be as a result, given we know that the margins are better in stores versus e-commerce? Thanks so much.

Hey, Corey. It's John, and Dave, I'll take this one together. You know, as you step back and think about this the omnichannel strategy, the role of stores, the role of the app and how they work together, it’s just important to remember that stores are a huge part of the solution to delivering the customer experiences that the customers are looking for. Having inventory, and I'll talk about The US and globally just here in a second, Having The US with 5,200 locations between Walmart and Sam's, where inventory is forward deployed, is really helpful. That's great for a customer who wants to shop in a store, pick up at the curb, or have delivery and do it in a very fast way. We have strength in international markets as well, places like China have had record deliveries from the clouds in Sam's Club for the season in Chinese New Year. That's also true in other markets in Mexico and Canada where I visited in the last few months. So stores are a really important part of it. How a customer wants to shop, that is up to the customer. It's pretty typical that you'd see in the holiday frame people leaning on delivery more. We had really great experiences and great results in November with Thanksgiving. More and more customers chose to have their Thanksgiving meal delivered. In this recent ice storm we had in The United States, we also saw a significant number of customers looking for delivery services, much higher than the year before. Whether people are shopping at the counter, shopping at the curb, or shopping in the store, we want to be there for all of them. In terms of the mix and the impact of the P&L, getting to where we were last year with e-commerce moving to profitability, the growth of advertisement, the growth of the other services, we like the way our P&L is set up in terms of providing mix over time. Again, we'll manage that really well. We have a great team of people who do that. Excited about the top line growth. Excited that our operating income grew faster than our sales in all three segments. I'm also very confident in the guidance that John David talked about. So do you want to talk about remodels and investments in stores?

Yeah. Absolutely. As John mentioned, we're focused on serving customers how, where, and when they want to shop across stores, pickup, and delivery. Our e-commerce growth of 27% is leveraging our physical footprint. This is an interconnected system. We're making further investments in our store network as a result in that physical footprint. Over the past twelve months, we've opened 12 new stores and remodeled 674 stores. Our investments in both of those areas are outperforming plan and reinforce the strength in the omnichannel model.

Good morning, everyone, and good luck, John, as you embark here.

Could you talk about the health of The US Consumer across income cohorts at this point in time? Any surprises this past holiday season? Looking ahead, when you look at the baskets of GLP 1 users, how has their shopping behavior changed in terms of frequency and basket size? And how does that influence your planning of inventory in the coming quarters and years?

Hey, Chuck. In the earlier comments, we talked about the consumer in The US. We had a lot of growth with customers in the income bracket of $100,000 or above. That's consistent with the last few quarters and the way we've talked about it. I don't think there's any big change. The way we describe our customers is thoughtful. They're choiceful. The lower-income segment, $50,000 and below, we did see, of course, stress. In many cases, we see people living paycheck to paycheck. In the fourth quarter specifically, there was some sales impact early on that was driven by benefits during the government shutdown that affected Walmart US in The United States. For the most part, Walmart US recovered as the quarter went on. There seems to be some impact on Sam's over time. The pharmacy business's biggest change would be the NFP MFP pricing changes on branded drugs. The remaining categories have been pretty consistent over time, and we provided some comments and guidance about what kind of impact we think that MFP will have. As far as categories around the store, digitally and physically, we're always watching changes in subcategories, what's growing. Our team starts every Monday talking about customer experiences and unit growth in particular. As we enter or potentially enter a period where inflation is lower or higher, it doesn't really matter to us. We'll manage the commodities as they come through. We'll focus on the lowest prices we can focus on. We had 6,200 rollbacks in Walmart US this quarter, up about 23% from a year ago. We’ll continue to focus on low prices, but as category shifts occur, our team will be reactive in terms of being able to be ready for customers wherever they're looking.

Regarding GLP 1, some of the impacts we see to our business are as you would expect. As an example, we see that fresh is a big driver. One of the big things in baskets. The unique thing about fresh is that it's a basket driver. When someone buys fresh items, the baskets tend to be larger by a double-digit percentage. Taking all of the puts and takes related to that, it’s kind of a wash. It doesn't really drive our growth one way or the other.

Yes. Thanks, guys, for taking the question. Congrats to all the new business leaders. I was curious, I know there are three of you, but your maybe brief thoughts as you take over your new role, what you see with fresh eyes as you enter each of the divisions you've taken over?

I'm thrilled to be in international. It's kind of a homecoming for me because I started out in international when I joined. There are lots of words you could use to describe international, but if I was to choose one it would be growth. I think growth is the top line, growth in the bottom line, so much opportunity globally. As we think about all of the words we've used today, build once scale globally, AI helping accelerate that, a platform-centric approach, the ability to take the magic of the culture, great assets that we've got internationally, and leverage platforms gives us the opportunity to do something we haven't been able to do before.

Good morning. I am thrilled to be back at Sam's Club. What I felt in this time is the energy and momentum of the business both with our associates and with our members. Being in clubs with members and associates has been a thrill. We can see how they love items. We can see how they love to shop. I’m excited about the opportunity to serve them the way they want to be served with great merchandise at great value, as fast as they want it, either from our clubs or as they use the mechanisms we have in the club.

Thanks for the question, Joe. First, I want to take the opportunity to thank the Walmart US associates in our stores, our supply chain, our home office, for delivering a fantastic quarter. US achieved 4.6% comp sales with profits growing faster than sales. As John mentioned earlier, I've spent the majority of my career in ecommerce and logistics. One feeling I've had the last few weeks is I'm humbled. I'm humbled to learn from and serve 1.5 million associates across Walmart US, and I am energized by what I've seen in my first few weeks. I've been in stores in California, Texas, Florida, visited a distribution center in Florida that is delivering fully palletized loads to all the over 120 stores that it serves. Last week, I was with the Walmart US leadership team at the year-beginning meeting. What's clear to me is that we are operating from a position of strength, and the opportunity ahead of us is significant. We're investing with confidence in automation, new stores, remodels, our marketplace, membership, advertising, and all of this will strengthen the customer experience. It's going to drive productivity. It's going to improve our economics over time. I am excited about the runway ahead.

I just wanted to go back to membership income. We saw another quarter of strong double-digit membership income growth.

So just curious as you look towards this fiscal year, just overall confidence in sustained momentum. Last quarter, you guys were very happy with Walmart's plus signups, including some on the credit card side.

So just curious, overall on Walmart Plus, whether any additional surprises as that program continues to ramp? Thank you.

No surprises, Rupesh. In fact, I'm really pleased with the fourth quarter. John David mentioned the credit card offer. That's been strong. Really pleased with the number of sign-ups. The usage rate of the benefits has been fantastic. One of the fastest-growing benefits, obviously, with free shipping is the express delivery and fast delivery services. That was up 60% year on year. We're really excited about the proposition. Having Walmart Plus with Seth DeLayer move to an enterprise level, we see room to expand this into more markets in The United States, and we're working on those plans. Overall, membership in Walmart has been strong. Sam's Club also had great results with membership in the quarter. We see continued momentum there, which should include Sam's Club in The United States and Sam's Club in China. We talked about that earlier. Strength across all these areas. The other thing I'd say about membership is it does give us a chance to serve customers frequently. When you combine membership with the work we're doing with Agentic Commerce, whether that's with Sparky or partnerships with Alphabet or OpenAI, it gives us more ways to understand the best way that our customers and our members want to be served.

Thanks, everyone, for the time and investment in Walmart today. Great to have you on the call. I just want to close by saying we have a clear strategy, and that's an omnichannel strategy. It's working in The United States and around the world. We see a lot of opportunity to expand what we've built to serve customers better, both here in this country and around the world. We have a great team. This is a real experienced leadership team. You heard from a number of those people today. While they're new in their roles, each and every one of them care about our associates. They care about our culture. They want to grow, and they're really experienced at the things they do. I have a lot of confidence in this team as we look ahead. Our capital strategy I'm also really pleased with investments that we've made. We'll continue to remain disciplined with how we invest capital. Every dollar competes for the best returns. That is true and will remain true. I just want to thank our associates all around the world, over 2 million people who are really hard each and every day to serve our customers. They're the ones that make all this happen. Our people really do make the difference. I'm looking forward to a great year and getting out to the markets and meeting more of our people.

Thank you. Ladies and gentlemen, thank you for your time.