Walmart reported another quarter of double-digit eCommerce expansion and used its Thursday (May 21) earnings call to describe how artificial intelligence (AI), fulfillment investments and platform businesses are changing the economics of retail growth. Executives argued consumers remain engaged, value is as relevant as ever and digital convenience is reshaping how spending decisions get made.
“We’re also becoming AI native,” CEO John Furner told analysts, describing efforts to use AI to make shopping more personalized and expand how customers interact with Walmart across channels.
Sparky, Walmart’s AI shopping assistant, is the clearest proof point.
Weekly active users more than doubled during the quarter, and Furner noted that improvements in AI increased Sparky’s intelligence and response quality by 40% this year. Customers can use Sparky in stores, automate repeat purchases and now interact in Spanish. Walmart also noted that Sparky users consistently generate larger average basket sizes than customers who don’t.
eCommerce Continues to Reshape Customer Behavior
Enterprise eCommerce sales increased 26% during the quarter and represented 23% of total net sales globally. Walmart U.S. recorded its ninth consecutive quarter of digital growth above 20%, continuing a trend that management repeatedly linked to speed and convenience.
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Delivery remained a central driver of that convenience.
Within Walmart U.S., delivery volume increased 45%, and more than 36% of store-fulfilled deliveries arrived in under three hours. During analyst questioning, executives repeatedly returned to the idea that faster fulfillment increases shopping frequency and broadens the range of purchases customers make with Walmart.
CFO John David Rainey said Walmart can now reach approximately 60% of U.S. households in 30 minutes or less. He linked those capabilities to stronger engagement and higher participation in membership programs, which continue to become a larger part of the business.
Membership fee revenue increased more than 17%, led by Walmart+ in the U.S. Management said members spend roughly four times more overall and generate significantly more annual eCommerce visits than non-members. Fuel savings benefits have also become more relevant in the current environment.
Marketplace sales in the U.S. increased nearly 50%, which management described as its strongest performance in roughly 10 quarters. Executives tied those gains to broader assortment, stronger seller participation and greater engagement from customers shopping beyond everyday replenishment categories. Walmart also launched marketplace cross-border capabilities into Canada and Mexico during the quarter.
Focused on Value
As for the consumer, there are clear signs of selectivity.
“We see with our customers that the higher-income customer is spending with confidence into many categories, while the lower-income consumer is more budget conscious and perhaps navigating financial distress,” Rainey said.
Customers, the executives stated, are moving deeper into Walmart’s assortment, particularly through digital channels and marketplace inventory rather than limiting purchases to routine grocery replenishment. The quarter was marked by stronger transaction growth alongside increased unit volumes, suggesting customers continued consolidating trips while looking for value across more categories.
At the same time, executives acknowledged at least some near-term pressure points, which helped send the shares lower by about 6.5% in early trading on Thursday.
Rainey said higher fuel prices are affecting household budgets while also increasing Walmart’s own fulfillment and distribution expenses. Walmart absorbed approximately $175 million in higher-than-expected fuel costs during the quarter. The company said sustained cost pressure could contribute to somewhat higher retail inflation later in the year.
Financially, Walmart reported revenue of $177.8 billion, up 5.9% in constant currency. Adjusted operating income increased 5.1%. Management reiterated full-year guidance.
