Is Walmart Stock Built to Withstand the Next Economic Downturn?

Published: Tuesday, January 20, 2026 at 10:05 am

Walmart: Recession-Resilient Retailer?

As economic uncertainty looms, investors are scrutinizing companies' ability to weather a potential downturn. One company drawing attention is retail giant Walmart. With economists divided on the immediate economic outlook, the question arises: is Walmart stock positioned to withstand the next recession?

Walmart, operating under its namesake stores and Sam's Club, generates the majority of its revenue from its U.S. operations. The company's core strategy, honed since its inception in the early 1960s, revolves around offering consistently low prices. This is achieved through rigorous cost management and strategic investments in technology. These investments focus on enhancing customer convenience through services like same-day pickup and delivery, and supply chain improvements.

This strategy appears to be resonating with consumers. In the fiscal third quarter ending October 31, 2025, Walmart U.S. division saw a 4.5% increase in same-store sales. This growth was fueled by increased customer traffic and higher spending per customer. Notably, management reported attracting higher-income consumers during this period, a trend also observed during the Great Recession.

Walmart's stock has performed well, with shares gaining 31.2% over the past year, outpacing the S&P 500 index. However, this success has led to a higher valuation. Walmart's stock currently trades at a price-to-earnings (P/E) ratio of 42, compared to 37 a year prior. This is also higher than the overall market, with the S&P 500 trading at a P/E multiple of 31.

BNN's Perspective:

While Walmart's valuation is higher than the market average, its proven ability to thrive in various economic climates, coupled with its strategic investments, suggests a degree of resilience. The company's focus on low prices and convenience positions it well to attract consumers during an economic slowdown. Investors should carefully consider the premium valuation, but Walmart's fundamentals suggest it is well-positioned to navigate potential economic headwinds.

Keywords: Walmart, WMT, stock, recession, economy, retail, sales, price-to-earnings ratio, valuation, Sam's Club, same-store sales, consumer, investment, low prices, economic downturn

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