Walmart’s e-commerce grows 26% in Q1, but margin story remains mixed

Walmart said global e-commerce sales rose 26% in the first quarter of fiscal 2027, with growth powered by store-fulfilled pickup and delivery and by third-party marketplace sales. The quarter also showed Walmart’s U.S. business continuing to add customers and transactions at the store level, with Walmart reporting U.S. comparable sales growth of 4.1%.

The company reported total revenue of $177.8 billion for the quarter, up 7.3% year over year. Operating income rose 5.0% (up 5.1% on an adjusted, constant-currency basis), while adjusted earnings per share came in at $0.66. Walmart said gross profit rate rose by 6 basis points, driven in part by business and merchandise mix in the U.S., even though operating income performance was hurt by higher fuel costs in distribution and fulfillment.

Walmart tied the e-commerce acceleration to operational changes that make its store network function more like a fulfillment hub. In the earnings presentation, the company said e-commerce includes about 45% growth in store-fulfilled delivery, and that expedited deliveries (under 3 hours) represented roughly 36% of store-fulfilled orders. It also reported marketplace sales up nearly 50%, describing that as its best performance in 10 quarters.

For investors focused on margin expansion, Walmart pointed to improving “eCommerce economics.” In the U.S. segment commentary, the retailer said adjusted operating income increased 5.7% and cited improved e-commerce economics, Walmart+ membership growth, and other income benefits as contributors. Walmart+, a paid membership program, is designed to bundle shopping perks and convenience, which can support recurring revenue and loyalty.

At the same time, the company’s results underscored how sensitive retail profitability can be to logistics inputs. Walmart said operating income was negatively affected by 250 basis points from higher fuel costs in distribution and fulfillment. That matters because store-fulfilled delivery and faster shipping typically require higher transportation and fulfillment spending, at least in the short run, even if transaction frequency increases.

Taken together, Walmart’s quarter suggests e-commerce growth is moving from “incremental” to “structural,” meaning it is increasingly tied to broader traffic and sales trends across the enterprise. In the U.S., Walmart estimated e-commerce contributed about 530 basis points to comparable sales, up from about 350 basis points in the prior-year quarter, indicating a larger role for digital commerce in driving store-based sales.

Still, Walmart did not provide a standalone view of e-commerce profitability. While the company discussed improved e-commerce economics and reported a gross profit rate improvement, it did not break out e-commerce operating margin, gross margin, or unit economics for delivery and marketplace as separate profit centers in the materials reviewed. That leaves open whether margin expansion from e-commerce will persist if delivery speed investments and fuel costs move against Walmart.

Looking ahead, Walmart reiterated outlook guidance for fiscal 2027 and issued Q2 expectations that net sales would grow 4% to 5% and adjusted operating income would rise 7% to 10% on a constant-currency basis. What to watch in upcoming quarters is whether e-commerce growth stays at a similar pace, whether faster delivery mix continues to scale (including the share of orders delivered within 3 hours), and whether logistics cost pressures ease enough for gross profit rate gains to translate into more consistent operating leverage.