What was the primary driver for the increase in net income despite a decrease in operating income?

The substantial increase in consolidated net income was primarily driven by significant gains from the changes in the fair value of the company's equity and other investments, which more than offset the decline in operating income. These investment gains are recorded in 'Other (gains) and losses'.

What factors led to the increase in operating expenses and the subsequent pressure on operating income?

Operating expenses as a percentage of net sales increased due to charges of $0.4 billion related to certain legal matters and higher self-insured general liability claims expense in the U.S. These factors, combined with strategic growth investments in certain segments, impacted overall operating income.

How did the different segments perform in terms of revenue and profitability?

Walmart U.S. saw revenue growth of 4.8% for the quarter and 4.0% for the six months, with operating income increasing slightly. Walmart International experienced revenue growth of 5.5% for the quarter but a 2.6% decrease for the six months, with operating income declining in both periods, partly due to currency fluctuations and mix shifts. Sam's Club U.S. reported revenue growth of 3.4% for the quarter and 3.2% for the six months, but operating income decreased in both periods, influenced by reorganization charges and increased expenses.

What is the company's liquidity position, and how is it managing its cash?

Walmart maintains a strong liquidity position with $9.4 billion in cash and cash equivalents at July 31, 2025. Net cash provided by operating activities was $18.4 billion for the first six months, and the company generated $6.9 billion in free cash flow. This robust cash flow supports operations, investments, dividends, and significant share repurchases.

WMT 10-Q Quarterly Report Q2 FY2026 — Revenue, Net Income, EPS

Summary

Walmart Inc. reported strong revenue growth in its latest 10-Q filing for the period ending July 31, 2025. Total revenues reached $177.4 billion for the quarter and $343.0 billion for the first six months, representing increases of 4.8% and 3.7%, respectively, compared to the prior year. This growth was primarily driven by solid comparable sales across its U.S. segments and international markets, fueled by increases in average ticket and transactions, and a strong performance in eCommerce. Despite the revenue growth, operating income saw a decline, particularly in the three-month period, dropping 8.2% to $7.3 billion, while for the six-month period it decreased 2.4% to $14.4 billion. This margin compression is attributed to increased operating expenses, notably higher self-insured general liability claims and charges related to certain legal matters. However, net income saw a significant boost to $7.2 billion for the quarter and $11.8 billion for the six months, largely due to substantial gains from the fair value changes in equity and other investments, more than offsetting the decrease in operating income. Diluted EPS increased to $0.88 for the quarter and $1.43 for the six months.

Financial Highlights

48 data points

Beta

Revenue

$175.75B

0.2% Gross Margin

Net Income

$7.03B

0.0% Net Margin

EPS (Diluted)

$0.88

Total Assets

$270.84B

Cash & Equivalents

$9.43B

Free Cash Flow

$6.52B

Financial Statements

Beta

Revenue	$175.75B
Cost of Revenue	$132.77B
Gross Profit	$42.98B
SG&A Expenses	$37.34B
Operating Income	$7.29B
Interest Expense	$651.00M
Net Income	$7.03B
EPS (Basic)	$0.88
EPS (Diluted)	$0.88
Shares Outstanding (Basic)	7.98B
Shares Outstanding (Diluted)	8.02B

Key Highlights

1Total revenues increased by 4.8% year-over-year to $177.4 billion for the three months ended July 31, 2025, and by 3.7% to $343.0 billion for the six months ended July 31, 2025.
2Comparable sales in the U.S. (including fuel) grew by 4.4% for the three months and 3.8% for the six months, demonstrating continued customer demand.
3Operating income decreased by 8.2% for the quarter to $7.3 billion and by 2.4% for the six months to $14.4 billion, impacted by higher operating expenses.
4Consolidated net income surged by approximately 51.8% to $7.2 billion for the quarter and 17.8% to $11.8 billion for the six months, significantly boosted by gains in investment valuations.
5Diluted net income per common share attributable to Walmart increased to $0.88 for the quarter and $1.43 for the six months, up from $0.56 and $1.19 respectively in the prior year.
6The company reported robust free cash flow generation, with $6.9 billion generated in the first six months of the fiscal year, an increase of $1.1 billion year-over-year, supported by higher operating cash flows.
7Significant legal charges and increased self-insured general liability claims expense contributed to the pressure on operating margins.

Walmart Inc. Quarterly Report for Q2 Ended Jul 31, 2025

Summary

Financial Highlights

Key Highlights

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