Walmart (NASDAQ:WMT) Chief Financial Officer and Executive Vice President John David Rainey told investors at JPMorgan’s 12th Annual Retail Roundup that the retailer’s long-term strategy remains intact despite a volatile backdrop that has included tariffs, war-related uncertainty, and shifting energy prices. Rainey said Walmart’s value positioning and growing mix of higher-margin revenue streams leave it “really well-insulated from some of the whims of the economy.”
Strategy continuity amid uncertainty
Rainey said Walmart is positioned to perform well even in tougher macro conditions because customers continue to seek value, and food—Walmart’s largest category—remains a staple. Reflecting on the company’s financial framework discussed at prior investor events, Rainey said Walmart has “grown operating income faster than we have revenue,” and that e-commerce now represents roughly 20% of the business.
CEO transition: “Not a pivot”
Rainey also addressed leadership changes, emphasizing continuity between former CEO Doug McMillon and current CEO John. Rainey described McMillon as “a titan” whose investments in price, wages, and technology helped shape today’s Walmart. Of the new CEO, Rainey said, “This is going to be very much a consistent strategy. This is not a pivot in any way.”
He added that John has been with the company for 35 years and has been deeply involved in key growth areas such as advertising, membership, and supply chain automation. Rainey argued that retail execution remains critical even as commerce evolves through AI and new shopping interfaces.
Consumer trends, fuel costs, and pricing posture
On the consumer, Rainey said he is “more constructive… than what one would glean from reading the headlines,” calling shoppers resilient and noting Walmart’s prior quarterly outlook remained “pretty much intact.” He said tax refunds have provided more benefit than expected, while higher oil prices—above $100 per barrel—were an offset the company did not anticipate.
Rainey said it is “too early” to determine the full impact of fuel costs on consumer behavior and potential downstream effects such as fertilizer-driven food inflation. Still, he said Walmart has been able to manage more than $100 million of fuel-related headwinds within the quarter using available levers. He also reiterated Walmart’s intent to remain aggressive on price to gain share, saying the retailer is “wired to keep prices as low as possible.”
Asked about in-store comp trends versus e-commerce strength, Rainey said store results shouldn’t be viewed in isolation because Walmart’s roughly 5,000 U.S. stores also function as fulfillment and delivery nodes, supporting service to “95% of America in less than three hours.”
Rainey characterized the current competitive pricing environment as “very rational” and said Walmart has seen retention among new customers improve versus prior periods. He said price gaps are wide by some historical measures, while noting competitiveness varies by region and competitor.
Marketplace growth and fulfillment focus
Rainey said Walmart’s Marketplace revenue is growing at roughly a 20% rate, with categories such as home, hardlines, and fashion growing north of 30%. He said the company had about three times the number of sellers during the holiday period versus a year earlier and currently lists roughly 500 million SKUs on the Marketplace.
He said Walmart has identified roughly 300 “must-have” brands for the platform and is about halfway penetrated, with about 75 added in the last year. Rainey said the company is using Marketplace as a key vehicle to broaden general merchandise assortment.
On profitability, Rainey said scale and greater adoption of Walmart Fulfillment Services (WFS) are central to improving economics. Roughly half of Marketplace GMV, he said, comes from sellers using WFS, which supports faster delivery and a better customer experience. While WFS is contribution-margin positive, Rainey said significant infrastructure remains before it becomes profitable.
Advertising, AI, and memberships
Rainey attributed the momentum in Walmart’s advertising business to customer growth across income cohorts and richer digital ad formats tied to e-commerce behavior. He also highlighted the VIZIO acquisition as enabling new advertising opportunities, including non-endemic ads. Rainey said Walmart is already doing “a very small amount” of non-endemic advertising and described it as “first inning,” while placing the overall ad business in “early to mid innings.” He added that best-in-class advertising dollars as a percentage of GMV are “easily twofold” Walmart’s current level, suggesting runway remains.
On AI and “agentic commerce,” Rainey said Walmart is actively shaping the shift rather than reacting to it. He cited early engagement with Walmart’s commerce agent, Sparky, saying roughly half of app users interact with it in some way. For customers who complete purchases through Sparky, Rainey said basket size is 35% higher than otherwise, with benefits seen across categories due to more contextual recommendations.
Rainey acknowledged potential risks that large language model platforms could disintermediate retailers and shift ad dollars, but said Walmart is focused on embedded experiences that preserve customer touchpoints and data. He also said richer context could improve ad targeting and return on ad spend.
Rainey said AI-driven P&L benefits are expected to begin showing up this year, though likely not materially noticeable against Walmart’s roughly $700 billion revenue base. He said higher conversion and improved discovery should translate into financial gains over time.
On memberships, Rainey said Sam’s Club implemented a $10 membership fee increase after nearly four years without one, following the addition of meaningful benefits—particularly in digital engagement, which he said applies to roughly 60% of members. For Walmart+, Rainey called it a candidate to be “the most essential membership… in America,” citing the ability to deliver pharmacy items, general merchandise, and fresh food within three hours to 95% of the U.S., while acknowledging the company still has opportunities to improve fulfillment consistency.
Looking longer term, Rainey said Walmart expects a pivotal shift in unit economics: within its planning horizon, the company expects a fully loaded e-commerce transaction—supported by advertising and other profit streams—to become more profitable than an in-store transaction. He also said there is an opportunity over time to return the U.S. business to operating margin levels around 7%, though “it won’t be in the next year.”
In closing, Rainey said he is most excited about AI and about improving the customer experience through better “perfect order” execution and broader assortment, including opportunities to expand food selection beyond basic staples.
About Walmart (NASDAQ:WMT)
Walmart is a multinational retail corporation that operates a broad portfolio of store formats and digital services. Its core business includes large-format supercenters, discount department stores, neighborhood grocery stores and a membership warehouse chain, Sam’s Club. The company’s merchandising mix covers groceries, household goods, apparel, electronics and pharmacy services, supplemented by private-label products and category-specific offerings. Walmart pairs its physical store network with online platforms and mobile applications to provide omnichannel shopping, fulfillment and delivery options for consumers and businesses.
The company was founded by Sam Walton, who opened the first store in Rogers, Arkansas in 1962; it is headquartered in Bentonville, Arkansas.
