Walmart Stock Gains Edge Over Costco on $6.4 Billion Ad Sales
Walmart stock gets the edge over Costco right now as global advertising revenue rose 37% to $6.4 billion and U.S. e-commerce climbed 27%. The comparison turns on Walmart's lower valuation and broader earnings engines. Costco still has the membership model, but the numbers now point to Walmart's faster mix shift.
Walmart Connect Drives $6.4 Billion
$6.4 billion in annual global advertising revenue came from Walmart Connect, the company's retail media network, and it grew 37%. That business sits alongside 27% operating income growth, giving Walmart more ways to widen earnings beyond basic store traffic. The company also continues to push into financial services and healthcare.
11% gross margins show why the model still looks thin on paper, yet the revenue mix is moving toward higher-margin activities. For investors comparing consumer staples stocks, that matters because the earnings path is no longer limited to selling low-margin goods. If those newer businesses keep expanding, Walmart's profit base can outgrow its legacy retail footprint.
Costco's 92.1% Renewal Rate
92.1% U.S. renewal and 89.7% global renewal rates explain why Costco keeps attracting long-term holders. Membership fee revenue hit $5.3 billion in fiscal 2025 and then grew 13.6% in the second quarter of fiscal 2026. Costco's Q1 fiscal 2026 net sales were $173.26 billion, up from $158.87 billion a year earlier, which shows the business still compounds at scale.
53 times trailing earnings is the friction point. That valuation is rich even with Costco's 26% return on invested capital and the durability of its renewal base. The company is still the higher-growth, membership-driven compounder in this matchup, but the price tag asks investors to pay for a lot of that strength up front.
16% Versus 26%
26% return on invested capital for Costco versus 16% for Walmart keeps Costco ahead on efficiency, but valuation and growth mix change the trade. Walmart has more near-term earnings levers, while Costco leans on a subscription-like model that already looks fully rewarded. Late 2024's membership price increase also helped support the fee stream that now shows up in the numbers above.
16% for Walmart is not the cleaner efficiency story, but the company is pairing that with broader commerce, advertising, financial services, and healthcare expansion. That combination gives it more room to compound earnings from multiple channels rather than one dominant membership stream. For investors choosing between the two, the current call is less about store traffic and more about which model can add profit faster from here.
Walmart stock therefore has the cleaner setup for buyers who want a lower valuation and more visible earnings catalysts today. Costco still wins on quality and renewal strength, but the premium multiple leaves less room for disappointment.
