Daniel Foelber, The Motley Fool
6 min read
In This Article:
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Walmart has rewarded investors with outsized gains.
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The retail giant is delivering value for consumers in-store and online.
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Even with Walmart’s advantages, the path forward will be challenging.
Last year, Walmart (NYSE: WMT) soared 71.9%, making it one of the best performers in the S&P 500 and the second-best performing component in the Dow Jones Industrial Average (behind only Nvidia).
Walmart is following up on that impressive performance with a 6.7% year-to-date gain at the time of this writing, which is far better than the S&P 500's 2.1% decline.
Here's why investors continue to gravitate toward the retail giant, and whether the dividend stock is a buy now.
The simplest reason Walmart has been such a standout among its peer group in recent years is the company's masterful execution across in-store, e-commerce, and home delivery through Walmart+.
Inflation and economic uncertainty have pressured consumers to be more cost-conscious. Walmart has presented itself as a one-stop shop for value -- from everyday essentials and groceries to discretionary goods and services. The value brand characteristic is resonating with consumers. Walmart's global e-commerce sales grew by 22% in the recent quarter (first quarter fiscal 2026), far outpacing its total constant currency revenue growth of 4%.
In the U.S., Walmart grew comparable sales by 4.5%, or 450 basis points. However, 350 basis points of that growth were from e-commerce. These results show that Walmart isn't firing on all cylinders, but that it is doing what it can amid a challenging operating environment to diversify its business so it's less dependent on in-store foot traffic.
Major themes across retailers -- from value outlets like Dollar General or Dollar Tree to a big-box player like Target are declining foot traffic and cost pressures. E-commerce is a way to be less dependent on foot traffic. But because e-commerce takes out the in-store experience, price becomes paramount.
The emphasis on efficiency is why digitally native Amazon has taken market share from brick-and-mortar stores. For example, Target is overhauling its strategy to focus on in-store experiences because it doesn't have the operating leverage necessary to compete with Amazon on price cuts. But Walmart does.
Walmart is in the sweet spot. Because it is already value-focused, it can leverage its vast network of stores and sophisticated supply chain to compete with Amazon on price. Walmart can also deliver groceries at ultra-low prices in a way that Amazon Fresh and Amazon-owned Whole Foods Market simply can't compete with.
