Walmart Inc

Results of Operations

Consolidated Results of Operations

(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 $4.1 billion or 2.5% for the three months ended April 30, 2025, when compared to the same period in the previous fiscal year. The increase was primarily due to strong positive comparable sales in our U.S. segments and international markets driven by growth in transactions and unit volumes, with strength in eCommerce as well as strong sales in grocery and health and wellness. Net sales for the three months ended April 30, 2025 were negatively affected by $2.4 billion in currency exchange rate fluctuations. Additionally, net sales growth was also impacted by approximately 1% due to one extra day in February 2024 as a result of a leap year. Membership and other income increased $0.1 billion or 3.7% for the three months ended April 30, 2025, primarily due to strong growth in membership fee income globally, partially offset by decreases in other income items.

Gross profit rate increased 12 basis points for the three months ended April 30, 2025, when compared to the same period in the previous fiscal year. The increase was primarily due to the Walmart U.S. segment driven by disciplined inventory management, including lower levels of markdowns, and growth in higher margin businesses, partially offset by mix shifts into lower margin merchandise categories. Additionally, the increase was partially offset by ongoing channel and format mix shifts in the Walmart International segment.

Operating expenses as a percentage of net sales increased 6 basis points for the three months ended April 30, 2025, when compared to the same period in the previous fiscal year. The increase was primarily due to increased depreciation and amortization and casualty claims expense in the U.S., partially offset by the lapping of business restructuring charges incurred in the previous fiscal 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 for the three months ended April 30, 2025 and 2024 consisted of net losses of $0.6 billion and net gains of $0.8 billion, 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 22.6% for the three months ended April 30, 2025, compared to 24.6% for the same period in the previous fiscal year. Our effective income tax rate may 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 may be different than the U.S. statutory rate.

As a result of the factors discussed above, consolidated net income decreased $0.7 billion for the three months ended April 30, 2025, when compared to the same period in the previous fiscal year. Accordingly, diluted net income per common share attributable to Walmart was $0.56 for the three months ended April 30, 2025, which represents a decrease of $0.07 when compared to the same period in the previous fiscal year.

Walmart U.S. Segment

Net sales for the Walmart U.S. segment increased $3.5 billion or 3.2% for the three months ended April 30, 2025, when compared to the same period in the previous fiscal year. The increase was due to comparable sales of 3.1% for the three months ended April 30, 2025, driven by growth in transactions and unit volumes, with strong sales in health and wellness and grocery. The Walmart U.S. segment's eCommerce sales positively contributed approximately 3.4% to comparable sales, which outpaced the total segment growth for the three months ended April 30, 2025. This growth reflects continued strength in customer and Walmart+ member engagement with omnichannel offerings, which was primarily driven by store-fulfilled pickup and delivery.

Membership and other income increased 3.8% for three months ended April 30, 2025, primarily driven by double-digit percentage growth in membership fee income from Walmart+.

Gross profit rate increased 25 basis points for the three months ended April 30, 2025, when compared to the same period in the previous fiscal year. The increase was primarily driven by disciplined inventory management, including lower levels of markdowns, and growth in higher margin businesses, partially offset by mix shifts into lower margin merchandise categories.

Operating expenses as a percentage of net sales increased 8 basis points for the three months ended April 30, 2025, when compared to the same period in the previous fiscal year. The increase was primarily due to increased depreciation and amortization, casualty claims expense, as well as VIZIO operating costs following the acquisition in December 2024, partially offset by the lapping of business restructuring charges incurred in the previous fiscal year.

As a result of the factors discussed above, operating income increased $0.4 billion for the three months ended April 30, 2025, when compared to the same period in the previous fiscal year.

Walmart International Segment

Net sales for the Walmart International segment decreased $0.1 billion or 0.3% for the three months ended April 30, 2025, when compared to the same period in the previous fiscal year. The decrease was primarily due to negative fluctuations in currency exchange rates of $2.4 billion, partially offset by positive comparable sales across our international markets.

Gross profit rate decreased 66 basis points for the three months ended April 30, 2025, when compared to the same period in the previous fiscal year. The decrease was primarily driven by ongoing channel and format mix shifts, partially offset by ongoing business mix changes.

Operating expenses as a percentage of net sales increased 22 basis points for the three months ended April 30, 2025, when compared to the same period in the previous fiscal year. The increase was primarily due to strategic growth investments, including investments in associate wages in our Mexico and Central America and Canada markets, partially offset by format mix shifts primarily in China.

As a result of the factors discussed above, operating income decreased $0.3 billion for the three months ended April 30, 2025, when compared to the same period in the previous fiscal year.

Sam's Club U.S. Segment

(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 $0.6 billion or 2.9% for the three months ended April 30, 2025, when compared to the same period in the previous fiscal year. The increase was primarily due to comparable sales, including fuel, of 2.8% for the three months ended April 30, 2025, driven by growth in club and digital transactions as well as unit volumes, including strong sales in grocery and health and wellness. Sam's Club U.S. eCommerce sales positively contributed approximately 3.3% to comparable sales for the three months ended April 30, 2025, which outpaced the total segment growth as a result of lower fuel sales. This growth reflects continued strength in member engagement with omnichannel offerings.

Membership and other income increased 8.2% for the three months ended April 30, 2025, when compared to the same period in the previous fiscal year. The increase was due to growth in the membership base and Plus penetration.

Gross profit rate increased 36 basis points for the three months ended April 30, 2025, when compared to the same period in the previous fiscal year. The increase for the three months ended April 30, 2025 was primarily due to improved margins in fuel.

Operating expenses as a percentage of net sales increased 25 basis points for the three months ended April 30, 2025, when compared to the same period in the previous fiscal year, primarily due to lower fuel sales combined with continued technology and associate wage investments.

As a result of the factors discussed above, operating income increased $0.1 billion for the three months ended April 30, 2025, when compared to the same period in the previous fiscal year.