Walmart Inc.
For the period ended Jan 31, 2025. Filed Mar 14, 2025.
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FY2025 · Filed Mar 14, 2025
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Item 7. Results of Operations
Results of Operations
Consolidated Results of Operations
| Fiscal Years Ended January 31, | |||
|---|---|---|---|
| (Dollar amounts and retail square feet in millions) | 2025 | 2024 | 2023 |
| Net sales | $674,538 | $642,637 | $605,881 |
| Percentage change from comparable period | 5.0% | 6.1% | 6.7% |
| Membership and other income(1) | $6,447 | $5,488 | $5,408 |
| Total revenues | 680,985 | 648,125 | 611,289 |
| Percentage change from comparable period | 5.1% | 6.0% | 6.7% |
| Gross profit(2) | 162,785 | 152,495 | 142,160 |
| Operating expenses(2) | 139,884 | 130,971 | 127,140 |
| Operating income | 29,348 | 27,012 | 20,428 |
| Other (gains) and losses | 794 | 3,027 | 1,538 |
| Consolidated net income | 20,157 | 16,270 | 11,292 |
| Percentage of net sales | |||
| Gross profit | 24.1% | 23.7% | 23.5% |
| Operating expenses | 20.7% | 20.4% | 21.0% |
| Operating income | 4.4% | 4.2% | 3.4% |
| Unit counts at period end | 10,771 | 10,616 | 10,623 |
| Retail square feet at period end | 1,053 | 1,053 | 1,056 |
(1) Membership and other income includes membership fees and other items such as rental and tenant income, recycling income, gift card breakage income, as well as other income from corporate campus facilities.
(2) Gross profit is defined as net sales less cost of sales. Operating expenses refers to operating, selling, general and administrative expenses.
Our total revenues increased $32.9 billion or 5.1% and $36.8 billion or 6.0% for fiscal 2025 and 2024, respectively, when compared to the previous fiscal year. These increases in revenues were primarily due to increases in net sales, which increased $31.9 billion or 5.0% and $36.8 billion or 6.1% for fiscal 2025 and 2024, respectively, when compared to the previous fiscal year. The increases were primarily due to strong positive comparable sales across our U.S. segments and international markets, driven primarily by growth in transactions and unit volumes, which included strength in eCommerce as well as strong sales in grocery, and health and wellness. Net sales were negatively impacted by $3.2 billion and positively impacted by $3.0 billion of fluctuations in currency exchange rates during fiscal 2025 and 2024, respectively. Membership and other income increased $1.0 billion and $0.1 billion for fiscal 2025 and fiscal 2024, primarily driven by growth in membership fee income globally.
Our gross profit rate increased 40 and 27 basis points for fiscal 2025 and 2024, respectively, when compared to the previous fiscal year. The increases were primarily driven by the Walmart U.S. segment, due to managing prices aligned to our competitive historic price gaps, as well as growth in higher margin businesses globally, partially offset by mix shifts into lower margin merchandise categories. Additionally, the increase in fiscal 2024 benefited from lapping higher markdowns incurred in the prior year.
Our operating expenses as a percentage of net sales increased 36 and decreased 60 basis points for fiscal 2025 and 2024, respectively, when compared to the previous fiscal year. The increase for fiscal 2025 was primarily due to higher variable pay as a result of exceeding planned performance, increased marketing and higher depreciation expenses. The decrease for fiscal 2024 was primarily due to lapping charges of $3.3 billion related to opioid-related legal settlements and $0.8 billion related to the reorganization and restructuring of certain businesses in the Walmart International segment in the prior year.
Other gains and losses consist of certain non-operating items, such as the change in the fair value of our investments and gains or losses on business dispositions, which by their nature can fluctuate from period to period. Other gains and losses consisted of net losses of $0.8 billion and $3.0 billion in fiscal 2025 and 2024, respectively, which primarily consisted of changes in fair value of our equity and other investments driven by changes in their underlying stock prices.
Our effective income tax rate was 23.4%, 25.5%, and 33.6% for fiscal 2025, 2024 and 2023, respectively. The decrease in effective tax rate in fiscal 2025 compared to fiscal 2024 is primarily due to the tax impact on changes in fair value of our investments. The higher effective tax rate in fiscal 2023 compared to fiscal 2025 and fiscal 2024 is primarily related to the tax impacts of the separation of Flipkart and PhonePe. Our effective income tax rate may also fluctuate as a result of various factors, including changes in our assessment of unrecognized tax benefits, valuation allowances, business operations, acquisitions, investments, entry into new businesses and geographies, intercompany transactions, changes in tax law, changes in the administrative practices, principles, and interpretations related to tax, and the mix and size of earnings among our U.S. operations and international operations, which are subject to statutory rates that are generally higher than the U.S. statutory rate. The reconciliation from the U.S. statutory rate to the effective income tax rates for fiscal 2025, 2024 and 2023 is provided in Note 9.
As a result of the factors discussed above, we reported $20.2 billion and $16.3 billion of consolidated net income for fiscal 2025 and 2024, respectively, which represents an increase of $3.9 billion and $5.0 billion for fiscal 2025 and 2024, respectively, when compared to the previous fiscal year. Diluted net income per common share attributable to Walmart ("EPS") was $2.41, $1.91 and $1.42 for fiscal 2025, 2024 and 2023, respectively.
Walmart U.S. Segment
| Fiscal Years Ended January 31, | |||
|---|---|---|---|
| (Dollar amounts and retail square feet in millions) | 2025 | 2024 | 2023 |
| Net sales | $462,415 | $441,817 | $420,553 |
| Net sales percentage change from comparable period | 4.7% | 5.1% | 6.9% |
| Calendar comparable sales increase | 4.8% | 5.5% | 7.0% |
| Membership and other income | $2,594 | $1,985 | $1,845 |
| Gross profit | 125,964 | 118,254 | 111,748 |
| Operating expenses | 104,676 | 98,085 | 92,973 |
| Operating income | 23,882 | 22,154 | 20,620 |
| Percentage of net sales | |||
| Gross profit | 27.2% | 26.8% | 26.6% |
| Operating expenses | 22.6% | 22.2% | 22.1% |
| Operating income | 5.2% | 5.0% | 4.9% |
| Unit counts at period end | 4,605 | 4,615 | 4,717 |
| Retail square feet at period end | 698 | 699 | 702 |
Net sales for the Walmart U.S. segment increased $20.6 billion or 4.7% and $21.3 billion or 5.1% for fiscal 2025 and 2024, respectively, when compared to the previous fiscal year. The increases in net sales were primarily due to increases in comparable sales of 4.8% and 5.5% for fiscal 2025 and 2024, respectively. Comparable sales in fiscal 2025 were driven by growth in transactions and unit volumes, with strong sales in grocery and health and wellness. Comparable sales in fiscal 2024 were driven by growth in transactions combined with growth in average ticket, including strong sales in grocery and health and wellness. Walmart U.S. eCommerce sales positively contributed approximately 2.9% and 2.6% to comparable sales for fiscal 2025 and 2024, respectively, which was primarily driven by store-fulfilled pickup and delivery.
Membership and other income increased $0.6 billion and $0.1 billion for fiscal 2025 and fiscal 2024, primarily driven by growth in membership fee income from Walmart+ and recycling income.
Gross profit rate increased 47 and 20 basis points for fiscal 2025 and 2024, respectively, when compared to the previous fiscal year. The increase in fiscal 2025 gross profit rate was primarily driven by managing prices aligned to our competitive historic price gaps and growth in higher margin businesses, partially offset by mix shifts into lower margin merchandise categories. The increase in fiscal 2024 gross profit rate was primarily due to managing prices aligned to our competitive historic price gaps and lapping higher net markdowns incurred in the prior year, partially offset by product mix shifts into lower margin categories.
Operating expenses as a percentage of segment net sales increased 44 and 9 basis points for fiscal 2025 and 2024, respectively, when compared to the previous fiscal year. The increase for fiscal 2025 was primarily due to increased marketing expenses, higher variable pay as a result of exceeding planned performance and increased depreciation expenses. For fiscal 2024, the increase was driven by higher variable pay relative to the prior year as a result of exceeding our planned performance.
As a result of the factors discussed above, segment operating income increased $1.7 billion and $1.5 billion for fiscal 2025 and 2024, respectively, when compared to the previous fiscal year.
Walmart International Segment
| Fiscal Years Ended January 31, | |||
|---|---|---|---|
| (Dollar amounts and retail square feet in millions) | 2025 | 2024 | 2023 |
| Net sales | $121,885 | $114,641 | $100,983 |
| Percentage change from comparable period | 6.3% | 13.5% | —% |
| Membership and other income | $1,478 | $1,408 | $1,621 |
| Gross profit | 26,618 | 24,810 | 21,651 |
| Operating expenses | 22,595 | 21,309 | 20,307 |
| Operating income | 5,501 | 4,909 | 2,965 |
| Percentage of net sales | |||
| Gross profit | 21.8% | 21.6% | 21.4% |
| Operating expenses | 18.5% | 18.6% | 20.1% |
| Operating income | 4.5% | 4.3% | 2.9% |
| Unit counts at period end | 5,566 | 5,402 | 5,306 |
| Retail square feet at period end | 274 | 274 | 273 |
Net sales for the Walmart International segment increased $7.2 billion or 6.3% and $13.7 billion or 13.5% for fiscal 2025 and 2024, respectively, when compared to the previous fiscal year. For fiscal 2025, the increase was primarily due to positive comparable sales in all of our international markets, which included strength in eCommerce, partially offset by negative fluctuations in currency exchange rates of $3.2 billion. For fiscal 2024, the increase was primarily due to positive comparable sales across our international markets and positive fluctuations in currency exchange rates of $3.0 billion.
Gross profit rate increased 20 basis points for both fiscal 2025 and 2024 when compared to the previous fiscal year. For fiscal 2025, the increase was primarily due to improved eCommerce margin and business mix changes, partially offset by ongoing channel and format mix changes. For fiscal 2024, the increase was primarily driven by supply chain efficiencies partially offset by ongoing channel and format mix shifts.
Operating expenses as a percentage of segment net sales decreased 5 and 152 basis points for fiscal 2025 and 2024, respectively, when compared to the previous fiscal year. The decrease in operating expenses as a percentage of segment net sales for fiscal 2025 was primarily due to increased sales driving expense leverage, partially offset by planned investments in associate wages and strategic priorities in Mexico and Central America. The decrease in operating expenses as a percentage of segment net sales for fiscal 2024, was primarily due to the lapping of business reorganization and restructuring charges incurred related to Flipkart and Massmart in fiscal 2023 and an increase in sales in fiscal 2024.
As a result of the factors discussed above, segment operating income increased $0.6 billion and $1.9 billion for fiscal 2025 and 2024, respectively, when compared to the previous fiscal year.
Sam's Club U.S. Segment
| Fiscal Years Ended January 31, | |||
|---|---|---|---|
| (Dollar amounts and retail square feet in millions) | 2025 | 2024 | 2023 |
| Including Fuel | |||
| Net sales | $90,238 | $86,179 | $84,345 |
| Percentage change from comparable period | 4.7% | 2.2% | 14.7% |
| Calendar comparable sales increase | 4.7% | 2.3% | 14.6% |
| Membership and other income | $2,323 | $2,051 | $1,908 |
| Gross profit | 10,203 | 9,431 | 8,761 |
| Operating expenses | 10,122 | 9,290 | 8,705 |
| Operating income | 2,404 | 2,192 | 1,964 |
| Percentage of net sales | |||
| Gross profit | 11.3% | 10.9% | 10.4% |
| Operating expenses | 11.2% | 10.8% | 10.3% |
| Operating income | 2.7% | 2.5% | 2.3% |
| Unit counts at period end | 600 | 599 | 600 |
| Retail square feet at period end | 80 | 80 | 80 |
| Excluding Fuel (1) | |||
| Net sales | $79,777 | $75,057 | $71,665 |
| Percentage change from comparable period | 6.3% | 4.7% | 10.5% |
| Operating income | $1,785 | $1,659 | $1,352 |
| Operating income as a percentage of net sales | 2.2% | 2.2% | 1.9% |
(1) We believe the "Excluding Fuel" information is useful to investors because it permits investors to understand the effect of the Sam's Club U.S. segment's fuel sales on its results of operations, which are impacted by the volatility of fuel prices. Volatility in fuel prices may continue to impact the operating results of the Sam's Club U.S. segment in the future.
Net sales for the Sam's Club U.S. segment increased $4.1 billion or 4.7% and $1.8 billion or 2.2% for fiscal 2025 and 2024, respectively, when compared to the previous fiscal year. The increases in net sales were primarily due to increases in comparable sales, including fuel, of 4.7% and 2.3% for fiscal 2025 and 2024, respectively. Comparable sales in fiscal 2025 were driven by growth in transactions and unit volumes, with strong sales in grocery and health and wellness. Comparable sales in fiscal 2024 were driven by growth in transactions and average ticket, including strong sales in grocery and health and wellness. Additionally, fiscal 2025 and 2024 growth was partially offset by lower fuel sales primarily due to lower market prices. Sam's Club U.S. eCommerce sales positively contributed approximately 2.3% and 1.7% to comparable sales for fiscal 2025 and 2024, respectively, which was primarily driven by club-fulfilled curbside pickup and delivery.
Membership and other income increased 13.3% and 7.5% for fiscal 2025 and 2024, respectively, when compared to the previous fiscal year. For fiscal 2025 and 2024, the increases were primarily due to growth in membership base and Plus penetration. Fiscal 2025 and 2024 were also positively impacted by the expiration of a promotional offering offsetting membership fee increases during the fourth quarter of fiscal 2024.
Gross profit rate increased 37 and 55 basis points for fiscal 2025 and 2024, respectively, when compared to the previous fiscal year. For fiscal 2025, the increase in gross profit rate was primarily due to improved operational efficiencies related to merchandise flow and increased margins in fuel, partially offset by higher eCommerce fulfillment costs. For fiscal 2024, the increase in gross profit rate was primarily due to the lapping of elevated markdowns in the prior year. Additionally, fiscal 2025 and 2024 gross profit rates were partially offset by product mix shifts into lower margin categories.
Operating expenses as a percentage of segment net sales increased 44 and 46 basis points for fiscal 2025 and 2024, respectively, when compared to the previous fiscal year. Fiscal 2025 operating expenses as a percentage of net sales increased primarily due to increased compensation related expenses, including associate wage investments and higher variable pay as a result of exceeding our planned performance, as well as elevated technology spend. Fiscal 2024 operating expenses as a percentage of net sales increased primarily due to lower fuel sales and elevated technology spend.
As a result of the factors discussed above, segment operating income increased $0.2 billion for both fiscal 2025 and 2024, respectively, when compared to the previous fiscal year.
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