Walmart Inc.’s WMT third-quarter fiscal 2026 performance highlighted a sharp acceleration in its global advertising business, raising an important question about whether ads are becoming a more meaningful profit engine for the company. Advertising revenues grew 53% during the quarter, underscoring the growing role of Walmart’s retail media ecosystem across its digital and physical platforms.
Growth was evident across geographies. In the United States, Walmart Connect delivered strong gains, excluding contributions from VIZIO, supported by increased participation from advertisers and greater engagement from third-party marketplace sellers. Internationally, advertising growth was led by Flipkart, where brand demand continues to rise as more sellers seek digital visibility tied directly to shopping behavior.
Management indicated that advertising directly benefits from Walmart’s expanding digital traffic and data-driven capabilities. As e-commerce penetration rises and fulfillment speed improves, Walmart is able to offer more targeted and measurable ad placements across search and display formats. Advertising is increasingly embedded within the shopping journey, allowing brands to reach consumers at the point of purchase rather than through standalone marketing channels.
Advertising is contributing to a broader shift in Walmart’s profit mix. During the third quarter, advertising, combined with membership income, accounted for roughly one-third of consolidated adjusted operating income, highlighting how these higher-margin streams are becoming more influential within the business model.
Together, these developments suggest that advertising is evolving beyond a supporting function and becoming a structurally important driver within Walmart’s omnichannel strategy.
What the Latest Metrics Say About Walmart
Walmart, which competes with Costco Wholesale Corporation COST and Target Corporation TGT, has seen its shares rally 21.5% in the past year compared with the industry’s growth of 22.4%. Shares of Costco have declined 11.4%, while Target tumbled 28.1% in the aforementioned period.
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From a valuation standpoint, Walmart's forward 12-month price-to-earnings ratio stands at 38.79, higher than the industry’s 35.71. WMT carries a Value Score of C. Walmart is trading at a premium to Target (with a forward 12-month P/E ratio of 12.39) but at a discount to Costco (41.16).
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The Zacks Consensus Estimate for Walmart’s current financial-year sales and earnings per share implies year-over-year growth of 4.5% and 4.8%, respectively.
Walmart 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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