01—Abstract
Summary
Summary of the 8-K filed February 20, 2025. Cited figures are marked; the original filing is the authoritative source.
Walmart reported fourth-quarter FY25 results (quarter ended January 31, 2025) showing solid top-line and profit momentum.
Total revenues rose 4.1% to $180.6 billiona (5.3% in constant currency), and operating income grew 8.3% to $7.9 billion, or 9.4% on an adjusted constant-currency basis. Global eCommerce grew 16%, and the global advertising business grew 29%. GAAP EPS was $0.65 and adjusted EPS was $0.66, up 10.0% year over year.
Walmart U.S. comparable sales rose 4.6%, driven by transactions and unit volumes, with gross margin expanding 51 bps and eCommerce up 20%. Full-year FY25 results were also strong: revenue reached $681.0 billionb (up 5.1%), operating income rose 8.6% (8.9% adjusted, 9.7% adjusted in constant currency), and return on investment improved 50 bps to 15.5%. Cash flow from operations was $36.4 billion, but free cash flow fell $2.5 billion to $12.7 billion because capital expenditures rose $3.2 billion to $23.8 billion to support the investment strategy.
Walmart also raised its annual dividend 13% to $0.94c per share, the largest increase in over a decade, and repurchased $4.5 billion of stock during the year. For FY26, management guided to net sales growth of 3% to 4% in constant currency and adjusted operating income growth of 3.5% to 5.5%, with headwinds from the VIZIO acquisition and lapping a leap year.
Adjusted EPS guidance is $2.50 to $2.60d, against $2.51 in FY25, implying roughly flat earnings. Investors will likely focus on whether margin expansion and eCommerce profitability can offset higher investment spending and the lower free cash flow profile.
02—Key points
Key Highlights
- Q4 revenue of $180.6B grew 4.1% (5.3% constant currency); operating income rose 8.3%, and adjusted operating income grew 9.4% in constant currency.
- Global eCommerce sales grew 16% and the global advertising business grew 29%, with Walmart Connect up 24% in the U.S.
- GAAP EPS was $0.65 and adjusted EPS was $0.66, up 10.0%, with adjustments for equity investment losses and an opioid settlement gain.
- FY25 free cash flow fell $2.5B to $12.7B as capital expenditures rose $3.2B to $23.8B, while operating cash flow rose $0.7B to $36.4B.
- The annual dividend was raised 13% to $0.94 per share, the largest increase in over a decade; $12.0B remains on the buyback authorization.
- FY26 guidance calls for 3%–4% constant-currency net sales growth and 3.5%–5.5% adjusted operating income growth, with adjusted EPS of $2.50–$2.60 versus $2.51 in FY25.
- Return on investment rose 50 bps to 15.5% and ROA rose to 7.9%, indicating improved capital efficiency despite higher investment.
03—Questions
Frequently Asked Questions
Why did free cash flow decline despite higher operating cash flow?
Free cash flow fell $2.5B to $12.7B in FY25 because capital expenditures increased $3.2B to $23.8B to support the company's investment strategy. Operating cash flow rose $0.7B to $36.4B, partially offsetting the capex increase.
What is driving Walmart's profit growth?
Operating income growth came from higher gross margins, membership income growth (up 17% in Q4), and improved eCommerce economics, including a 53 bps gross margin rate improvement in Q4. Operating expenses deleveraged somewhat due to variable pay, utilities, marketing, and VIZIO acquisition costs.
What should investors expect for FY26?
Management guided to 3%–4% constant-currency net sales growth and 3.5%–5.5% constant-currency adjusted operating income growth. Headwinds include about 80 bps from the VIZIO acquisition and about 70 bps from lapping a leap year. Adjusted EPS of $2.50–$2.60 is roughly flat against FY25's $2.51, with a $0.05 currency headwind.
Are there any one-time items affecting reported earnings?
Yes. Q4 GAAP results included a net loss of $0.02 per share on equity and other investments, which management excludes from adjusted EPS, and a $0.01 per-share benefit from an opioid-related shareholder derivative settlement, which is also excluded. FY25 included about $0.02 per share of business reorganization charges, mainly in Walmart U.S.
How is Walmart returning capital to shareholders?
In FY25, Walmart repurchased 61.9 million shares for $4.5 billion and paid dividends of $6.7 billion. The company raised its FY26 dividend 13% to $0.94 per share, and $12.0 billion remains under its $20 billion buyback authorization.
04—Continue