10-QPeriod: Q2 FY2025

Walmart Inc. Quarterly Report for Q2 Ended Jul 31, 2024

Filed August 30, 2024For Securities:WMT

Summary

Walmart Inc. reported solid financial results for the second quarter and first half of fiscal year 2025, demonstrating resilience in a dynamic economic environment. Total revenues saw a notable increase, driven by robust comparable sales growth across its U.S. segments, particularly in grocery and health & wellness, alongside a positive contribution from eCommerce. The company also experienced significant growth in membership and other income, signaling strong customer engagement with its loyalty programs. While the company navigated increased operating expenses, partly due to higher marketing and variable pay, its gross profit margin improved. This was primarily attributed to effective price management and growth in higher-margin businesses. Despite a decrease in net income for the quarter, driven by a significant swing in "Other (gains) and losses" primarily related to investment valuations, the six-month period showed a slight increase in net income. The company continues to invest strategically in its supply chain, customer-facing initiatives, and technology, alongside disciplined capital allocation, including dividends and share repurchases, underscoring a commitment to long-term shareholder value.

Financial Highlights

48 data points
Beta

Revenue

$167.77B

24.4% Gross Margin

Net Income

$4.50B

2.7% Net Margin

EPS (Diluted)

$0.56

Total Assets

$254.44B

Cash & Equivalents

$8.81B

Free Cash Flow

$6.28B

Financial Statements
Beta
Revenue$167.77B
Cost of Revenue$126.81B
Gross Profit$40.96B
SG&A Expenses$34.59B
Operating Income$7.94B
Interest Expense$557.00M
Net Income$4.50B
EPS (Basic)$0.56
EPS (Diluted)$0.56
Shares Outstanding (Basic)8.04B
Shares Outstanding (Diluted)8.08B

Key Highlights

  • 1Total revenues increased by 4.8% for the quarter and 5.4% for the six months, reaching $169.3 billion and $330.8 billion, respectively.
  • 2Walmart U.S. comparable sales grew 4.2% in the quarter and 4.6% year-to-date, driven by transaction growth and strength in grocery and health & wellness.
  • 3Sam's Club comparable sales rose 4.7% in the quarter and 4.6% year-to-date, also boosted by transaction growth and key product categories.
  • 4Membership and other income increased by 16.0% for the quarter and 18.5% for the six months, indicating strong customer loyalty and engagement.
  • 5Gross profit margin improved by 43 basis points for both the quarter and the six-month period, reflecting effective pricing and higher-margin business growth.
  • 6Operating income saw an increase of 8.5% for the quarter and 9.0% for the six months, reaching $7.9 billion and $14.8 billion, respectively.
  • 7The company announced the sale of its investment in JD.com for $3.6 billion in net proceeds, expected to be reflected in the second half of the fiscal year.

Frequently Asked Questions

Walmart reported strong revenue growth. For the three months ended July 31, 2024, total revenues were $169.3 billion, an increase of 4.8% compared to the prior year. For the six months ended July 31, 2024, total revenues were $330.8 billion, an increase of 5.4%.

Comparable sales growth in the U.S. segments, including Walmart U.S. and Sam's Club, was primarily driven by an increase in transactions. Key sales drivers included strength in grocery, health and wellness categories, and a positive contribution from eCommerce, particularly through store-fulfilled pickup and delivery options.

Walmart improved its gross profit margin by 43 basis points for both the quarter and the six-month period. This improvement was attributed to managing prices to maintain competitive price gaps, growth in higher-margin businesses globally, and disciplined expense management. While operating expenses as a percentage of net sales increased due to higher marketing expenses and variable pay, the company's focus on productivity initiatives and strategic business mix helped to offset some of these pressures.

The 'Other (gains) and losses' line item significantly impacted net income, particularly in the third quarter. For the three months ended July 31, 2024, there was a net loss of $1.16 billion, compared to a gain of $3.9 billion in the prior year's quarter. This swing was primarily due to changes in the fair value of the company's equity and other investments, driven by fluctuations in underlying stock prices. This caused a decrease in net income for the quarter, though the six-month period saw a slight increase in net income.