Walmart Q3 2025 Earnings
What This Means for Your Brand
Translating Walmart's performance into actionable insights
E-commerce Momentum
Action Items:
- Get on Walmart.com immediately if you're not already there. Don't wait for "perfect" timing.
- Optimize for store-fulfilled delivery—this is where Walmart is investing heavily.
- Plan inventory for online demand, not just shelf space. Online mix is growing faster than stores.
- If you're digital-first, Walmart marketplace is now a viable alternative to Amazon for CPG.
Walmart Connect Advertising
Action Items:
- Budget 3-5% of Walmart sales for Walmart Connect advertising. It's table stakes now.
- Start with sponsored products on your own listings to defend search rankings.
- Test display ads if you have budget—Walmart's audience reach is massive (255M weekly customers).
- Track ROAS closely. Walmart Connect typically delivers 3-5X return for CPG brands.
Traffic Growing Faster Than Ticket
Action Items:
- Focus on everyday pricing, not just promotional spikes. Customers are visiting frequently.
- Position your brand as a "stock-up" item to capture those smaller, more frequent trips.
- Track weekly velocity, not monthly. Small trips = need for consistent in-stock rates.
- Consider smaller pack sizes for frequent shoppers who want convenience over bulk savings.
Sam's Club Outpacing Walmart
Action Items:
- If you're in Walmart, pitch Sam's Club. The buyer is often different but the relationship helps.
- Create club-pack sizes (bulk, multi-packs) specifically for Sam's—don't just upsize your Walmart SKU.
- Members spend 2-3X more per trip than Walmart customers. Premium positioning can work here.
- Test Sam's first if you're not ready for full Walmart distribution—lower SKU count, higher velocity.
SNAP Pause Impact
Action Items:
- If you're in value grocery, plan for SNAP volatility—build 2-3 week buffer inventory.
- Don't over-invest in Q1 grocery promotions. SNAP uncertainty + post-holiday slowdown = risk.
- Consider premium positioning to diversify beyond SNAP-dependent customers.
- Track your category's SNAP penetration—if it's >40%, you need contingency plans.
General Merchandise Still Soft
Action Items:
- If you're in GM, negotiate flex terms with co-manufacturers. Don't over-commit inventory.
- Plan for heavier markdown risk in H1 2026. Build 5-10% markdown reserve into your P&L.
- Focus on value SKUs, not premium. Walmart's GM customer is trade-down focused right now.
- Consider pivoting marketing dollars to grocery adjacencies if you have product range.
Walmart vs Target Q3 2025 Performance
Walmart
Target
Context & Considerations
Performance Drivers
Walmart's growth is driven by grocery strength (55-60% of sales mix) which performs consistently across economic cycles. Target's mix is 60% discretionary/general merchandise, making it more vulnerable to economic uncertainty and consumer spending slowdowns. Target's lower comp sales reflect category mix, not necessarily execution quality.
Target's Unique Strengths
Target maintains significantly higher operating margins (~6% vs Walmart's 3.7%) and serves a higher-income customer base (average household income $65K+ vs Walmart's $55K). Target Circle has 100M+ members with strong engagement, and their private label portfolio (Good & Gather, All in Motion, etc.) continues to outperform. For premium or design-forward CPG brands, Target's customer and merchandising approach may be a better fit regardless of top-line growth rates.
Leadership Transitions at Both Retailers
Walmart: John Furner, current CEO of Walmart U.S., will succeed Doug McMillon as CEO on February 1, 2026. This is a planned internal succession from a position of strength. McMillon will leave both the C-suite and board, signaling confidence in Furner's readiness. Furner has led Walmart U.S.'s $600B+ annual business through strong growth and is seen as a continuity choice.
Target: Michael Fiddelke, current COO and former CFO, will replace Brian Cornell as CEO on February 1, 2026. Fiddelke is a 20-year Target veteran who started as an intern. Cornell will stay on as executive chairman—a controversial decision that some analysts view as "staying the course" when many hoped for an outside CEO to drive change. Fiddelke inherits a company facing headwinds: comp sales down 2.7% in Q3 vs Walmart's +4.5%.
What to watch: Both new CEOs take over the same day (Feb 1, 2026). Furner is expected to continue Walmart's current trajectory. Fiddelke has announced a $1B investment to remodel stores and revamp merchandise—signals of a turnaround attempt. Category priorities, vendor programs, and merchandising strategies may shift under new leadership at both retailers through 2026.
Strategic Considerations for Brands
Walmart advantages: Higher growth momentum, massive e-commerce acceleration, grocery strength, advertising platform growth.
Target advantages: Higher margins, premium positioning, better for discovery brands, smaller footprint (easier to test and scale), stronger merchandising for design/trend-driven products.
Opportunity at Target: Buyers need new products to drive traffic and comp sales. Emerging brands with proven velocity may find Target more accessible during slower growth periods. Less competition for shelf space when other brands are pulling back.
Bottom line: Match your brand positioning to retailer strengths, not just top-line growth numbers. Premium, design-focused, and trend-driven brands often perform better at Target. Value-focused, high-velocity, and grocery-adjacent brands typically align better with Walmart.
Need Help Navigating Walmart's Growth?
These insights are just the beginning. We help CPG brands translate retail earnings into actionable supply chain, merchandising, and distribution strategies. Whether you're trying to get into Walmart, scale your existing business, or navigate the shift to e-commerce and advertising—we can help.
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