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Walmart Ups View Again on Q3 Earnings Beat, E-Commerce Sales Growth
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Walmart Inc. (WMT - Free Report) posted another solid quarterly performance, with third-quarter fiscal 2025 top and bottom lines increasing year over year and cruising past their respective Zacks Consensus Estimate. Management raised its fiscal 2025 guidance yet another time, indicating continued strength.
The company experienced growth across all business segments, with rising store and club sales, expanding e-commerce, increased pickup options and accelerated delivery services. Newer ventures like the marketplace, advertising and membership have contributed to diversified profits, reinforcing the resilience of Walmart’s business model.
Walmart’s Quarterly Metrics: Key Insights
Walmart’s adjusted earnings of 58 cents per share jumped 13.7% from the year-ago period’s figure of 51 cents. The metric came ahead of the Zacks Consensus Estimate of 53 cents.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
Total revenues grew 5.5% year over year to $169.6 billion, which beat the consensus mark of $167.5 billion. However, revenues included an adverse currency impact of $1.2 billion. On a constant-currency (cc) basis, total revenues climbed 6.2%. Revenues were backed by strength across all operating segments.
Global e-commerce sales surged 27% on store-fulfilled pickup & delivery and marketplace. The company witnessed a 22% increase in global membership income. WMT’s global advertising business advanced 28%.
The consolidated gross profit margin expanded 21 basis points (bps) to 24.2%, driven by Walmart U.S. Pricing efforts, enhanced inventory management, better e-commerce margins and the improved business mix (in U.S. and International segments) backed the gross margin expansion.
Operating expenses deleveraged 19 bps due to hurricane-related recovery costs, elevated marketing and increased variable pay.
The company’s operating income increased 8.2% year over year to $6.7 billion due to solid sales growth, a greater gross margin and higher membership income, partly negated by expense deleverage.
Decoding Walmart’s Segmental Show
Walmart U.S.: The segment’s net sales grew 5% year over year to $114.9 billion. U.S. comp sales, excluding fuel, improved 5.3% due to transaction growth of 3.1% and an average ticket increase of 2.1%. Sales growth was backed by broad-based strength in merchandise categories, and physical and digital channels. Grocery, health & wellness and general merchandise category all saw increased comp sales.
WMT witnessed solid transaction counts and unit volumes, with continued share gains fueled by higher-income households. E-commerce boosted comps by 290 bps. E-commerce sales in the segment rose 22%, driven by store-fulfilled pickup & delivery, advertising and marketplace.
As of the third quarter, Walmart U.S. had nearly 4,600 pickup locations and about 4,500 delivery stores. The company remodeled about 240 stores during the reported quarter. The operating income of the Walmart U.S. segment jumped 9.1% to $5.4 billion.
Walmart International: The segment’s net sales rose 8% to $30.3 billion, including currency headwinds of $1.2 billion. On a cc basis, net sales jumped 12.4%, driven by Walmex, China and Flipkart. Transaction counts and unit volumes increased in all markets. The company witnessed strength in food and consumables, as well as general merchandise.
E-commerce sales went up 43%, backed by marketplace and store-fulfilled pickup & delivery. E-commerce penetration expanded across markets. The advertising business jumped 50%, thanks to Flipkart. Management expects e-commerce and advertising business growth for the second half to be similar to the first half. The operating income, on a cc basis, grew 16.7% to $1.3 billion.
Sam’s Club U.S.: The segment, which comprises membership warehouse clubs, witnessed a net sales increase of 7.2% to $20.3 billion (excluding fuel). Sam’s Club’s comp sales, excluding fuel, grew 7%. While transactions grew 6.4%, the average ticket climbed 0.5%. The company witnessed robust sales growth across club and digital channels, fueled by food, as well as health & wellness categories.
Comp sales were driven by growth in transaction counts and unit volumes. The company witnessed an increased share in grocery and general merchandise categories. The membership income increased 15% year over year in the quarter. The Plus penetration rate continued to rise. E-commerce fueled comps by 290 bps. E-commerce net sales jumped 26% at Sam’s Club U.S., backed by club-fulfilled pickup and delivery. The segment’s operating income totaled $0.6 billion, up 6.9% year over year.
WMT Stock: Other Updates & Developments
Walmart ended the quarter with cash and cash equivalents of $10 billion and total debt of $47.3 billion.
Year to date, WMT generated an operating cash flow of $22.9 billion and a free cash flow of $6.2 billion. In fiscal 2025, capital expenditures are likely to account for nearly 3-3.5% of net sales.
Walmart repurchased 46 million shares for $3 billion year to date while making regular dividend payments. The company had $13.5 billion remaining under its share buyback plan.
What to Expect From WMT in Fiscal 2025?
Walmart raised its guidance for fiscal 2025. The company anticipates a generally steady consumer environment, along with ongoing pressure stemming from its diverse product mix and formats on a global scale.
WMT expects consolidated net sales growth of 4.8-5.1% (at cc) compared with 3.75-4.75% expected earlier.
Adjusted operating income is expected to increase 8.5-9.25% at cc, up from 6.5-8% projected before.
Net interest expenses are likely to be almost in line with the year-ago period compared with the prior projection of escalating approximately $100 million.
Walmart expects adjusted EPS for fiscal 2025 to be in the $2.42-$2.47 range, up from the prior guidance range of $2.35-$2.43. The company recorded an adjusted EPS of $2.22 in fiscal 2024.
Shares of this Zacks Rank #3 (Hold) company have risen 14.7% in the past three months compared with the industry’s growth of 14%.
The Zacks Consensus Estimate for Deckers’ current financial-year sales and earnings indicates growth of 13.6% and 12.6%, respectively, from the year-ago reported figures.
Target Corporation (TGT - Free Report) , a general merchandise retailer, currently carries a Zacks Rank #2 (Buy). TGT has a trailing four-quarter earnings surprise of 20.3%, on average.
The Zacks Consensus Estimate for Target’s current financial-year earnings implies growth of around 6.8% from the year-ago reported numbers.
Dillard's, Inc. (DDS - Free Report) , a department store retailer, currently carries a Zacks Rank #2. DDS has a trailing four-quarter earnings surprise of 8.8%, on average.
The Zacks Consensus Estimate for Dillard's current financial-year sales suggests a dip of 5.4% from the year-ago reported figure.
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Walmart Ups View Again on Q3 Earnings Beat, E-Commerce Sales Growth
Walmart Inc. (WMT - Free Report) posted another solid quarterly performance, with third-quarter fiscal 2025 top and bottom lines increasing year over year and cruising past their respective Zacks Consensus Estimate. Management raised its fiscal 2025 guidance yet another time, indicating continued strength.
The company experienced growth across all business segments, with rising store and club sales, expanding e-commerce, increased pickup options and accelerated delivery services. Newer ventures like the marketplace, advertising and membership have contributed to diversified profits, reinforcing the resilience of Walmart’s business model.
Walmart’s Quarterly Metrics: Key Insights
Walmart’s adjusted earnings of 58 cents per share jumped 13.7% from the year-ago period’s figure of 51 cents. The metric came ahead of the Zacks Consensus Estimate of 53 cents.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
Walmart Inc. Price, Consensus and EPS Surprise
Walmart Inc. price-consensus-eps-surprise-chart | Walmart Inc. Quote
Total revenues grew 5.5% year over year to $169.6 billion, which beat the consensus mark of $167.5 billion. However, revenues included an adverse currency impact of $1.2 billion. On a constant-currency (cc) basis, total revenues climbed 6.2%. Revenues were backed by strength across all operating segments.
Global e-commerce sales surged 27% on store-fulfilled pickup & delivery and marketplace. The company witnessed a 22% increase in global membership income. WMT’s global advertising business advanced 28%.
The consolidated gross profit margin expanded 21 basis points (bps) to 24.2%, driven by Walmart U.S. Pricing efforts, enhanced inventory management, better e-commerce margins and the improved business mix (in U.S. and International segments) backed the gross margin expansion.
Operating expenses deleveraged 19 bps due to hurricane-related recovery costs, elevated marketing and increased variable pay.
The company’s operating income increased 8.2% year over year to $6.7 billion due to solid sales growth, a greater gross margin and higher membership income, partly negated by expense deleverage.
Decoding Walmart’s Segmental Show
Walmart U.S.: The segment’s net sales grew 5% year over year to $114.9 billion. U.S. comp sales, excluding fuel, improved 5.3% due to transaction growth of 3.1% and an average ticket increase of 2.1%. Sales growth was backed by broad-based strength in merchandise categories, and physical and digital channels. Grocery, health & wellness and general merchandise category all saw increased comp sales.
WMT witnessed solid transaction counts and unit volumes, with continued share gains fueled by higher-income households. E-commerce boosted comps by 290 bps. E-commerce sales in the segment rose 22%, driven by store-fulfilled pickup & delivery, advertising and marketplace.
As of the third quarter, Walmart U.S. had nearly 4,600 pickup locations and about 4,500 delivery stores. The company remodeled about 240 stores during the reported quarter. The operating income of the Walmart U.S. segment jumped 9.1% to $5.4 billion.
Walmart International: The segment’s net sales rose 8% to $30.3 billion, including currency headwinds of $1.2 billion. On a cc basis, net sales jumped 12.4%, driven by Walmex, China and Flipkart. Transaction counts and unit volumes increased in all markets. The company witnessed strength in food and consumables, as well as general merchandise.
E-commerce sales went up 43%, backed by marketplace and store-fulfilled pickup & delivery. E-commerce penetration expanded across markets. The advertising business jumped 50%, thanks to Flipkart. Management expects e-commerce and advertising business growth for the second half to be similar to the first half. The operating income, on a cc basis, grew 16.7% to $1.3 billion.
Sam’s Club U.S.: The segment, which comprises membership warehouse clubs, witnessed a net sales increase of 7.2% to $20.3 billion (excluding fuel). Sam’s Club’s comp sales, excluding fuel, grew 7%. While transactions grew 6.4%, the average ticket climbed 0.5%. The company witnessed robust sales growth across club and digital channels, fueled by food, as well as health & wellness categories.
Comp sales were driven by growth in transaction counts and unit volumes. The company witnessed an increased share in grocery and general merchandise categories. The membership income increased 15% year over year in the quarter. The Plus penetration rate continued to rise. E-commerce fueled comps by 290 bps. E-commerce net sales jumped 26% at Sam’s Club U.S., backed by club-fulfilled pickup and delivery. The segment’s operating income totaled $0.6 billion, up 6.9% year over year.
WMT Stock: Other Updates & Developments
Walmart ended the quarter with cash and cash equivalents of $10 billion and total debt of $47.3 billion.
Year to date, WMT generated an operating cash flow of $22.9 billion and a free cash flow of $6.2 billion. In fiscal 2025, capital expenditures are likely to account for nearly 3-3.5% of net sales.
Walmart repurchased 46 million shares for $3 billion year to date while making regular dividend payments. The company had $13.5 billion remaining under its share buyback plan.
What to Expect From WMT in Fiscal 2025?
Walmart raised its guidance for fiscal 2025. The company anticipates a generally steady consumer environment, along with ongoing pressure stemming from its diverse product mix and formats on a global scale.
WMT expects consolidated net sales growth of 4.8-5.1% (at cc) compared with 3.75-4.75% expected earlier.
Adjusted operating income is expected to increase 8.5-9.25% at cc, up from 6.5-8% projected before.
Net interest expenses are likely to be almost in line with the year-ago period compared with the prior projection of escalating approximately $100 million.
Walmart expects adjusted EPS for fiscal 2025 to be in the $2.42-$2.47 range, up from the prior guidance range of $2.35-$2.43. The company recorded an adjusted EPS of $2.22 in fiscal 2024.
Shares of this Zacks Rank #3 (Hold) company have risen 14.7% in the past three months compared with the industry’s growth of 14%.
Stocks Looking Red Hot
Deckers (DECK - Free Report) , a footwear and accessories dealer, currently sports a Zacks Rank #1 (Strong Buy). DECK delivered an average earnings surprise of 41.1% in the trailing four quarters. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Deckers’ current financial-year sales and earnings indicates growth of 13.6% and 12.6%, respectively, from the year-ago reported figures.
Target Corporation (TGT - Free Report) , a general merchandise retailer, currently carries a Zacks Rank #2 (Buy). TGT has a trailing four-quarter earnings surprise of 20.3%, on average.
The Zacks Consensus Estimate for Target’s current financial-year earnings implies growth of around 6.8% from the year-ago reported numbers.
Dillard's, Inc. (DDS - Free Report) , a department store retailer, currently carries a Zacks Rank #2. DDS has a trailing four-quarter earnings surprise of 8.8%, on average.
The Zacks Consensus Estimate for Dillard's current financial-year sales suggests a dip of 5.4% from the year-ago reported figure.