Walmart Earnings

November 20, 2025

Most people wouldn’t think of Walmart as a consistent market outperformer.  But it’s true.  Over the past 3, 5, 10 years, Walmart stock has behaved more like a big cap tech stock than a sleepy old retailer.   [Past performance is not an indication of future success.]

That performance was driven by superior results.  And that trend continued today.   Walmart reported results this morning, and sales were better than expected.   Total sales grew +5.8%, driven by rapid growth in e-commerce and international sales.   E-commerce grew 27%(!), led by store-fulfilled pickup and delivery.   Walmart is effectively turning its store base into a mini-warehouse operation for online sales.   International sales grew 11%, driven by strong growth in China.  International sales are roughly 20% of total at Walmart now, including Mexico, Latin America, China, and others.

As a stock, the e-commerce and international growth are the two key differentiators between Walmart and just a regular retail operation.   The e-commerce growth is a similar thesis playing out at Costco as well.  And you can see it in their stock performance, if you compare Walmart and Costco to companies like Target or Lowe’s.  

However, from a US macro perspective, mgmt pointed to the same weakness in low income consumers that we’ve heard from McDonald’s and others.  “Middle-income households have been steady, and while lower-income families have been under additional pressure of late”.

Other Retail Earnings

Yesterday, we got earnings from other big retailers – Target, Lowe’s and TJ Maxx.  If I could sum them up in one word?  “Glum”.  Both Target and Lowe’s mentioned that consumer sentiment is at a three year low point.  TJ Maxx (a low end discounter) did better than expected.  But that could be from customers trading down to lower priced options.  

Target specifically said:  “As we approach the holidays, we know consumers remain cautious. Sentiment is at a three-year low amid concerns about jobs, affordability, and tariffs.  Top-line results during the quarter were quite volatile, with net sales close to flat in August and October and down about 4% in September. “  Lowe’s said: “Sales results continue to be impacted by softer  demand within an uncertain macro-environment”.  Although, Lowe’s business is being helped somewhat by their services offerings.

We talk a lot about the K-shape economy – things are going well for high income folks and going poorly for low income folks.  We saw more evidence of that today