Robbie Ohmes

Emily detailed the DG TP26 format's improved adjacencies; Todd said SKU rationalization continues, now more surgical.

Todd said DG has removed ~1.2 thousand SKUs over the past couple years, improving DC and store productivity, gross margin, and in-stock levels, with more opportunity ahead.

CFO quantified Q4 LIFO at $45M (32bp headwind), inflation very low single digits. CEO and COO Emily Taylor detailed SKU reduction of 1,500+ SKUs, floor stand reductions, aggressive seasonal sorts in DCs, case fit improvements. Net reduction plan for 2026. All in-store metrics (clean, in-stock, recovered, engaged) up significantly.

CEO detailed fresh distribution network built 2021-22, produce in 7,000+ stores, and how delivery enables fresh food to reach rural customers within one hour.

CEO discussed competitive closures creating opportunity, drugstores as largest share donor, and DG's unique delivery positioning in rural markets. Confident tone.

Gregory said inflation pressure will mount in the second half, more than Q1, while David expects Kroger to stay below CPI and protect margins by taking cost out with suppliers.

Ron clarified e-commerce profitable in H1 2026, not just full year. Drivers beyond third parties include refreshed website, AI/Agentic shopping, in-stock improvements, and delivery service enhancements. Third-party partners on track for $1.5B+ on top of organic growth. David expects fuel gallons and profits slightly down in 2026.

Ron explained paper coupons appeal to older customers and those without smartphones who felt disenfranchised by digital-only offers. David confirmed seeing unit lift from paper coupons with good customer feedback. No changes planned to fuel rewards program.

Ron noted both income cohorts making more frequent trips with smaller baskets. Food away from home inflation above food at home for 27 consecutive months driving eat-at-home shift. Discretionary spend softer in snacks, adult beverages, pet.

Ron attributed ID sales to pharmacy, fresh perimeter, e-commerce, and Our Brands outperformance. David noted inflation just under 2%, ESI impact less than 10bps, and continued GLP-1 growth.

Bill emphasized Stainmaster leak defense as a trade-up (not trade-down) offering, with strength across luxury vinyl, resilient hybrid, and hard surface tile.

Bill confirmed consistent promotional cadence with pre-Black Friday events, Cyber Monday, and holiday offers for both loyalty members and all consumers.

Marvin expressed high expectations for marketplace as the first in home improvement, citing global retail evidence that marketplace presence correlates with sustainable omnichannel growth.

Marvin emphasized price competitiveness and portfolio approach. Bill detailed the 60% US / 20% China sourcing split with diversification efforts underway.

Furner said headwind reflective of health and wellness and pharmacy being strongest growth and expected to continue into Q4. Maximum fair pricing impact in January may affect health and wellness top line. Fashion grew over 5% with more customers choosing Walmart for fashion and unit growth consistent across basics for kids mens and womens. Over time business mix improvements between channels encouraging as e-commerce shifted from loss to profitability. Rainey said merchandise category mix pressure goes back to high single-digit inflation couple of years ago and is more macro phenomenon than Walmart specific. Marketplace helping with categories that had been pressured.

McMillon acknowledged key question but said must be flexible. Impressed with merchant navigation so far. Each category buyer thinking through cost impacts elasticity and customer response for Halloween and Christmas. Wants to preserve flexibility to make decisions item by item. Team did great job managing back-to-school and summer seasonal sell-throughs including toys. Will watch price gaps gross margins and bottom line profitability. Will do what needed to serve customer and preserve top-line momentum while growing profit faster than sales by year end as reflected in guidance.

Rainey said business now 18% e-commerce up 1,100 basis points from five years ago. SG&A for digital transaction higher than brick and mortar creating channel mix pressure. Historically thought of cost profile as 20% or slightly below for brick and mortar. Big driver going forward will be supply chain automation improvements. Less than half of US stores fully served by automation with lot of benefit still to come. Q4 marketing investment drove general merchandise improvement.

Doug said it's all of the above: grocery and GM, price and convenience. Walmart+ membership and remodels give optimism that gains are sustainable. John Furner added pickup and delivery share is higher in premium categories.

Matt said the Q2 charge reflects resource reallocation toward strategic areas, with some impacts this year and some carrying into next year, but no material additional restructuring expected.

Corie explained the carrier operating model expansion (majority of stores by back half) drives mobile growth through easier access to complex pricing/plans with specialized associates. Mobile grew in both Q1 and Q2 after years of declines.

Matt attributed growth to improved attachment trends from dedicated store labor; expects FY2026 services growth aligned with total enterprise revenue growth as membership changes are lapped.

John Ordus reported December sales over $2M, first $1M specialist achieved. 75% of specialists are external hires bringing existing client relationships. Plans to double to ~100 specialists in 2026, targeting $50M in sales. Growth described as structural.

Hal said discretionary softness same as earlier quarters: customers cautious on non-essential big ticket items like dog kennels, trailers, gun safes. Seasonal big ticket (riders) strong when need-driven. Rob Mills reported retail media tripling revenue YoY with 80%+ partnership expansion.

Hal said no pull-forward; July momentum actually strengthened. Favorable lapping vs drought summer last year, limited emergency response, and no winter. Rural America consumer confidence strong.