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Walmart Inc. (WMT)·Q4 2025 Earnings Summary

Executive Summary

  • Q4 FY25 delivered solid top-line and stronger profit growth: total revenues $180.6B (+4.1% reported; +5.3% cc) with gross margin +53 bps YoY and operating income +8.3%; adjusted EPS $0.66 (GAAP EPS $0.65) .
  • Mix headwinds from Grocery/Health persisted, but eCommerce profitability improved (U.S. net delivery cost/order down ~20% QoQ; global eCommerce +16%; advertising +29%) supporting margin expansion and profit growing faster than sales .
  • FY26 guidance targets net sales +3–4% (cc), adjusted operating income +3.5–5.5% (cc), adjusted EPS $2.50–$2.60; Q1 FY26 EPS guided to $0.57–$0.58, both including currency/VIZIO/leap-year headwinds; dividend raised 13% to $0.94 (largest increase in over a decade) .
  • Street consensus (S&P Global) was unavailable at time of writing, so beat/miss vs estimates cannot be stated; CFO noted results exceeded Walmart’s internal sales, profit and earnings expectations, a positive tone into FY26 planning .

What Went Well and What Went Wrong

  • What Went Well

    • eCommerce scaling better economics: global eCommerce +16%; U.S. marketplace +34%; WFS penetration near 50%; U.S. net delivery cost/order down ~20%, supporting gross margin expansion (+53 bps) and operating income growth outpacing sales .
    • High-margin “new profit pools” accelerated: global advertising +29% (Walmart Connect +24%); global membership income +16% in Q4 (about $3.8B for the year), aiding mix and profit durability .
    • U.S. comps resilient with better GM: Walmart U.S. comps +4.6% (transactions +2.8%, ticket +1.8%), eCommerce +20%; Health & Wellness up mid-teens with GLP-1 contributing ~100 bps; lower markdowns aided gross profit .

  • What Went Wrong

    • SG&A deleverage: adjusted operating expenses as % of net sales up 52 bps YoY to 20.5% on higher variable pay, marketing, utilities and VIZIO transaction costs; reported SG&A deleveraged 46 bps .
    • FX headwinds and calendar effects: currency reduced reported Q4 sales by ~$2.1B (~120 bps), and Flipkart BBD timing shift reduced International Q4 growth vs Q3 .
    • Sam’s Club margin pressure: operating income -7.4% YoY (without fuel -11.8%) on wage/incentive investments and lapping prior LIFO benefit (~730 bps headwind) .

Financial Results

Consolidated results (oldest → newest)

MetricQ4 FY24Q3 FY25Q4 FY25
Total Revenues ($B)$173.388 $169.588 $180.554
GAAP Diluted EPS ($)$0.68 $0.57 $0.65
Adjusted EPS ($)$0.60 $0.58 $0.66
Gross Profit Margin (%)23.3% 24.2% 23.9%
Operating Income ($B)$7.254 $6.708 $7.859
Adjusted EBITDA ($B)$10.371 $9.968 $11.134
Adjusted EBITDA Margin (%)6.0% 5.9% 6.2%

Segment breakdown (Net sales and Operating income)

SegmentMetricQ4 FY24Q3 FY25Q4 FY25
Walmart U.S.Net sales ($B)$117.643 $114.875 $123.523
Operating income ($B)$6.075 $5.435 $6.524
Walmart InternationalNet sales ($B)$32.419 $30.277 $32.208
Operating income ($B)$1.438 $1.204 $1.404
Sam’s Club U.S.Net sales ($B)$21.852 $22.851 $23.099
Operating income ($B)$0.620 $0.634 $0.574

Key KPIs

KPIQ4 FY24Q3 FY25Q4 FY25
Walmart U.S. Comp ex-fuel (%)4.0% 5.3% 4.6%
Walmart U.S. Transactions ex-fuel (%)—+3.1% +2.8%
Walmart U.S. Avg Ticket ex-fuel (%)—+2.1% +1.8%
Walmart U.S. eCommerce growth (%)—+22% +20%
Sam’s U.S. Comp ex-fuel (%)3.1% 7.0% 6.8%
Sam’s U.S. Transactions ex-fuel (%)—+6.4% +5.4%
Sam’s U.S. Avg Ticket ex-fuel (%)—+0.5% +1.3%
Sam’s U.S. eCommerce growth (%)—+26% +24%
Global eCommerce growth (%)—+27% +16%
Global advertising growth (%)—+28% +29% (Walmart Connect +24%)
Global membership & other income growth (%)—+22% (YTD) +17% (Q4)

Notes: Dashes indicate not disclosed in cited quarter documents.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net sales (cc) growthQ1 FY26N/A+3.0% to +4.0%New
Adjusted operating income (cc)Q1 FY26N/A+0.5% to +2.0%New
Adjusted EPS ($)Q1 FY26N/A$0.57–$0.58 (incl. ~$0.02 FX headwind)New
Net sales (cc) growthFY26N/A+3.0% to +4.0%New
Adjusted operating income (cc)FY26N/A+3.5% to +5.5%New
Adjusted EPS ($)FY26N/A$2.50–$2.60 (incl. ~$0.05 FX headwind)New
Effective tax rateFY26N/A~23.5%–24.5%New
Interest, netFY26N/A+$100M to +$200MNew
Capital expendituresFY26N/A~3.0%–3.5% of net salesNew
Dividend (annual)FY26$0.83$0.94 (+13%)Raised

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 FY25, Q3 FY25)Current Period (Q4 FY25)Trend
eCommerce profitabilityQ2: reduced losses; net delivery cost/order down ~40%; Q3: reduced losses; profitability improving Incremental eCom margins ~11%; U.S. net delivery cost/order down ~20% in Q4 Improving
Advertising (Retail Media)+26% (Q2) ; +28% (Q3) +29% globally; Walmart Connect +24% Accelerating
MembershipStrong growth noted in Q2/Q3 Global membership income +16%; Sam’s Plus penetration up 180 bps YoY Strong/expanding
Gross margin vs mixGM +51 bps (Q2); +21 bps (Q3) GM +53 bps; lower markdowns, better mix offsetting grocery/health mix headwind Sustained expansion
Express/same-day delivery adoption—>30% of orders paid for <1–3hr; 77% on Christmas Eve express Rising usage
GLP-1 impact (Rx)GLP-1 ~100 bps to U.S. comps (Q3) ~100 bps to Health & Wellness comp in Q4 Consistent
Supply chain automationOngoing investments cited (Q2/Q3) More to be shared at April investor event; automation to drive SG&A efficiency Ramping
International cadence (Flipkart BBD)Q3 benefited from timing shift Q4 impacted by shift; FX -$2.0B sales Timing normalized
VIZIO acquisition—Closed; ~70 bps Q1 headwind; expected accretive next year Integration underway
PhonePe—Preparing for IPO in India New optionality

Management Commentary

  • “We finished the year with another quarter of strong results... We're growing profit faster than sales, and we have runway to scale our higher-margin businesses like membership, marketplace and advertising.” – Doug McMillon, CEO .
  • “Over the last year, global advertising grew 27% to about $4.4 billion... global membership income grew 21% to about $3.8 billion.” – John David Rainey, CFO .
  • “Adjusted EPS of $0.66 compared favorably to our expectations… Reported EPS included ~$0.01 from currency and nearly $0.01 from costs related to the acquisition of VIZIO.” – CFO .
  • “For fiscal year 2026, we expect consolidated net sales growth of approximately 3% to 4%… operating income to grow faster than sales at 3.5% to 5.5%.” – CFO .
  • “PhonePe… is making preparations for an IPO in India.” – CEO .

Q&A Highlights

  • Pace of investment vs rising incremental margins: Management believes they’re striking the right balance—continuing price/associate investments while expanding margins, supported by tech and supply chain automation benefits already visible in results .
  • Tariffs/macro in FY26 guide: No explicit tariff assumption; team confident in ability to navigate; guide remains measured given uncertainty .
  • eCommerce economics drivers: Route densification, paid express delivery (>30% of customers opt for 1–3 hour), and higher-margin streams (advertising, membership) drove the improvement; on Christmas Eve, 77% of orders were express .
  • VIZIO integration: ~70 bps Q1 dilution from transaction costs; expected to be accretive next year; enhances Walmart Connect distribution via SmartCast OS .
  • SG&A outlook: Digital channel mix keeps pressure on SG&A ratio, but automation in supply chain/stores and disciplined EDLC culture expected to drive efficiency over time .
  • Walmart+ momentum and pharmacy delivery: Walmart+ growth steady; pharmacy same-day delivery off to strong start with attach to broader baskets .

Estimates Context

  • S&P Global consensus for Q4 FY25 EPS/Revenue/EBITDA was unavailable due to API limits at the time of writing. As a result, we cannot provide beat/miss vs Wall Street consensus for this quarter (values would normally be retrieved from S&P Global). Management stated Q4 performance exceeded internal sales, profit and earnings expectations .

Key Takeaways for Investors

  • Mix-resilient margin expansion: Gross margin +53 bps YoY despite grocery/health mix; eCommerce delivery cost/order down ~20% and retail media/membership scaling help sustain profit growth > sales .
  • Durable growth vectors: Advertising (+29%), marketplace/WFS (near 50% penetration), and membership (+16% in Q4) diversify and thicken margins into FY26 .
  • FY26 setup: Guide implies steady growth with operating income outpacing sales, even after VIZIO/leap-year headwinds; early-half FX may be a larger headwind per CFO .
  • U.S. traffic-led comps with GM improvement: Walmart U.S. comp +4.6% on traffic and units; Health & Wellness strength (GLP-1 ~100 bps) and lower markdowns supported gross profit .
  • International/FX watch items: Strong China/Walmex/Canada momentum, but FX reduced Q4 reported sales by ~120 bps and Flipkart timing shifted volume between Q3/Q4; model with cc and timing normalization .
  • Dividend/capital return: 13% dividend increase to $0.94 (largest in a decade) signals confidence; buybacks continued with $12B authorization remaining at Q4 .
  • Near-term trading lens: Positive tone on demand (January strongest in U.S.), margin drivers intact, and FY26 guide conservative/credible; watch Q1 dilution from VIZIO (~70 bps to OI growth) and FX headwinds for near-term optics .

Appendix: Additional Details

  • Consolidated income statement highlights: Net sales $178.8B (+4.0%); membership & other income $1.724B (+17%); operating income $7.859B (+8.3%); GAAP diluted EPS $0.65; adjusted EPS $0.66 (excludes $0.02 net losses on equity/other investments and $0.01 opioid settlement proceeds) .
  • Walmart U.S.: Net sales $123.5B (+5.0%); comps +4.6%; eCommerce +20%; gross profit +7.0% with rate +51 bps (26.8%); operating income $6.5B (+7.4%) .
  • Walmart International: Net sales (cc) $34.3B (+5.7%); reported $32.2B (-0.7%); operating income $1.4B (cc +10.1%) with FX -$0.2B impact; BBD timing shifted to Q3 .
  • Sam’s Club U.S.: Net sales $23.1B (+5.7%); comp ex fuel +6.8%; eCommerce +24%; operating income $574M (-7.4%) on wages/incentives and lapping LIFO .
  • Balance sheet/liquidity: Cash & equivalents $9.0B; total debt $45.8B; FY25 operating cash flow $36.4B (+$0.7B YoY); free cash flow $12.7B (-$2.5B YoY) on higher capex .