Walmart CEO Doug McMillon says he is a self-proclaimed “retail lifer and gadget geek.” He is also a risk-taker, much like founder Sam Walton, who at age 64 experimented with a club format that has grown into an $86 billion business.
McMillon and his executive group have taken risks in navigating challenging economic metrics to improve business flexibility and diversification. Over the past three years, Walmart has reshaped its growth strategy, doubling down on high-margin revenue streams like advertising, memberships and marketplace expansion. The strategic shift is lifting profitability and putting Walmart at the head of the pack, according to analysts with Morningstar.
McMillon recently emphasized the company’s resilience in managing through periods of uncertainty. He said the ongoing transformation — driven by investments in customer and member experiences, technology and a flexible business model — has set it up to adapt quickly to changing market conditions.
“While in the short term we are not immune to some of the effects businesses face in today’s operating environment, we are uniquely positioned to play offense,” McMillon said. “Changes we’re making to our business add even more strength and flexibility for our future. We’re an ‘and’ company. We’re people and tech, stores and eCommerce, innovation and execution.”
Chief Financial Officer John David Rainey said the retailer is growing operating income faster than sales.
In the first quarter ending April 30, Walmart saw big gains from its evolving business mix. Walmart Connect, the in-house advertising business, posted revenue growth of 50% year over year, fueled in part by its December 2024 acquisition of Vizio. Walmart Connect generated $4.4 billion in global ad revenue last year, up 27% compared with the previous year.
Seth Dallaire, chief growth officer at Walmart U.S., oversees Walmart Connect, Walmart+ membership, data ventures and customer data. Dallaire was selected by the Walton family as the 2025 recipient of the Sam M. Walton Entrepreneur of the Year Award at the retailer’s recent shareholder meeting. He joined Walmart in 2021 from Instacart and spent nearly eight years at Amazon working in global advertising sales.
“He has been a real contributor at developing a new profit stream for the company, exposing us to more people, giving us more information about our customers and those who are not yet our customers,” said retired board chairman Rob Walton. “He has made an exciting contribution to the diversification of our business.”
CONNECT, MARKETPLACE TRENDS
Walmart Connect posted 31% growth in the U.S. in the recent quarter. Sam’s Club grew advertising revenue by 21% and international ad revenues rose by 20%, led by Flipkart in India.
Walmart Connect has more room for growth as Walmart continues to grow its online marketplace and supplier base. Walmart’s online marketplace reached a major milestone, surpassing 200,000 active sellers for the first time, driven by the fastest rate of seller growth in the platform’s history, according to Michael Mosser, vice president of category management for Walmart Marketplace.
In the first five months of 2025, Walmart added 44,000 new sellers, a big jump compared with 59,000 in all of 2024. The rapid expansion signifies Walmart.com as a rising e-commerce force, though it remains much smaller than Amazon. Walmart has a much larger in-store business than Amazon, and it continues to be attractive to third-party sellers because of lower fees and support through advertising and fulfillment services, according to Mosser.
Walmart also achieved a significant milestone by reporting its first quarterly profit from the U.S. e-commerce operations ending April 30. Walmart’s U.S. Marketplace sales grew 21% in the first quarter, capping 12 consecutive quarters of double-digit growth. Globally, e-commerce marketplace sales grew 22% in the recent quarter.
Walmart recently announced an expansion with StockX for Nike, New Balance, UGG, and other popular luxury sport and lifestyle brands. The launch began with a few hundred items but will expand to 15,000 items, including 1,200 items for children in time for back to school. Walmart offers more than 500 million items online and continues to expand its inventory.
“Walmart is always evaluating its profile as a digital shopping destination by continuing to add higher profile, in-demand brands that our customers search for but are unexpected at Walmart,” Mosser said.
Marketplace allows Gucci and Louis Vuitton to be top-selling brands of bags on Walmart.com through the retailer’s partnership with Bag, Borrow or Steal that sells gently used luxury handbags on Walmart.com.
DATA BUSINESS, MEMBERSHIPS
Data Ventures and Membership are also growing revenue streams at Walmart. Walmart’s data ventures business rebranded is the retailer’s effort to monetize its consumer data from 255 million weekly shoppers in its 10,600-plus stores around the globe and online.
Walmart said expansion of Scintilla — its data ventures business — into new markets and banners is part of the transformation of retail strategies.
Memberships have long been a revenue driver for Sam’s Club, but Walmart is also benefiting from membership income through Walmart+ and Walmart Business subscriptions. This is a consistent revenue stream that prompts members to shop more with the retailer, creating a higher overall spend, according to Walmart+ senior vice president Deepak Maini.
While Walmart has not provided exact subscription metrics, membership for Walmart+ had reached 59 million households by 2023, according to some estimates. Morgan Stanley estimated earlier this year that membership was roughly 26.5 million members, or 20% of U.S. households. Walmart slashed the subscription price late last year, perhaps leading to membership growth.
Rainey said in February that membership income grew 16% in the quarter across the enterprise from a year ago. Benefits that come with a $98 annual membership for Walmart+ include 10-cent-a-gallon savings on fuel bought at Walmart gas stations and at Murphy USA, free home delivery for online orders and Scan & Go options inside stores.
Membership income at Sam’s Club grew 22% over the past two years, and renewal rates reached an all-time high during the first quarter of this year, according to Sam’s Club CEO Chris Nicholas.
Editor’s note: The Supply Side section of Talk Business & Politics focuses on the companies, organizations, issues and individuals engaged in providing products and services to retailers. The Supply Side is managed by Talk Business & Politics, and is sponsored by HRG.
