Stock Pitch 10: Walmart
At King’s Capital, members of our equities team, Shaurya and Garrett, have taken a long position in Walmart Inc. (WMT), recognising it as a strong, stable investment with consistent returns. As the world’s largest retailer, Walmart has successfully adapted to changing market dynamics by leveraging its scale, diverse market presence, and digital innovation. With a strong financial track record and clear growth strategies, Walmart presents an attractive long-term investment opportunity.
Walmart operates across three key segments: Walmart U.S., Walmart International, and Sam’s Club. Serving over 255 million customers each week across 10,600 stores in 19 countries, the company generates around 80% of its sales in the U.S. Its diverse offerings, from groceries to health and wellness products, are underpinned by the ‘Everyday Low Prices’ (EDLP) strategy, which has maintained its dominance in retail. The company’s growth is fuelled by its robust mix of physical stores and expanding digital presence, with initiatives like Walmart GoLocal, Walmart Fulfilment Services, and Walmart Connect enhancing operational efficiency.
Founded by Sam Walton, Walmart has grown into a global retail giant. It operates in a $32 trillion retail market which is projected to grow at a 7.6% CAGR through 2029, with e-commerce, technological advancements, and rising consumer spending as key drivers. Walmart’s investments in e-commerce, advertising, and international expansion are positioning it for continued growth and profitability. The company’s ability to leverage both physical and digital channels has helped it maintain a strong competitive edge in an increasingly digital world.
Walmart’s ability to continue growing despite economic challenges highlights its resilience. By focusing on low prices, digital expansion, and operational efficiency, Walmart remains a dominant player in the global retail market. The company’s strong omnichannel strategy, bolstered by its investments in technology, automation, and fulfilment infrastructure, sets it up for long-term profitability. Walmart is not only capitalising on the growth of e-commerce but also expanding its reach in emerging markets, positioning itself for sustained success in the coming years.
Walmart’s strength lies in its ability to maintain low prices while embracing digital transformation. Its scale, diversified business, and tech-driven initiatives make it a resilient investment, especially during economic downturns. With steady revenue growth, cost efficiencies, and expanding digital capabilities, Walmart is set to outperform competitors and remain a retail leader.
International expansion is a key driver, with an 8.8% rise in net sales abroad in Q3 FY2025. Strong performance in India, Mexico, and China alongside Flipkart’s 28% YoY advertising revenue growth underscores Walmart’s ability to capitalise on global opportunities. E-commerce and digital growth are accelerating, with a 27% increase in online sales. Investments in automation, fulfilment infrastructure, and digital advertising further strengthen Walmart’s competitive edge against Amazon and Target. AI-driven efficiency is enhancing inventory management and pricing, helping Walmart capture high-income consumers. Combined with strong grocery demand, these advancements have fuelled significant sales and operating income growth. With its scale, innovation, and strategic investments, Walmart is well-positioned for long-term success. Its proven track record and strong market position make it a compelling choice for investors seeking stability and growth in the retail sector.
Disclaimer: This is not financial advice but our personal opinion. King's Capital will not be held liable for any gains or losses incurred by following this information. Our analyses are based on paper trading, with no real capital allocated.
