Walmart Inc. (WMT) has solidified its position as a retail powerhouse, seamlessly blending its brick-and-mortar stores with a robust eCommerce presence to deliver an unparalleled customer experience. As the world's largest company by revenue, Walmart has consistently demonstrated its ability to navigate the evolving retail landscape, driving growth and creating value for its shareholders.
Business Overview
Walmart's origins can be traced back to 1945, when Sam Walton opened the first variety store in Newport, Arkansas. The following year, Sam's brother James L. Walton opened a similar store in Versailles, Missouri. For the next 16 years, the founders' business focused solely on operating variety stores. In 1962, the company pivoted its strategy and began opening discount stores, marking a significant shift in its business model.
Walmart's growth accelerated rapidly, leading to its initial public offering in 1970. The company continued to innovate and expand its offerings, opening its first Sam's Club warehouse membership club in 1983 and its first supercenter store in 1988. In 1998, Walmart introduced the Walmart Neighborhood Market concept, further diversifying its retail portfolio.
The company's international expansion began in 1991 with a joint venture in Mexico, setting the stage for its global presence. Walmart's eCommerce journey started in 1996 with the creation of walmart.com and samsclub.com. In 2007, the company launched its Site-to-Store service, allowing customers to make online purchases and pick up merchandise in stores, an early step towards its current omni-channel strategy.
Walmart's digital transformation continued with strategic acquisitions. In 2018, the company took majority stakes in Flipkart and PhonePe in India, significantly expanding its eCommerce and digital presence. These acquisitions provided Walmart with valuable technology, talent, and expertise, enabling the company to enhance its global assortment and service offerings.
Today, Walmart operates through three primary business segments: Walmart U.S., Walmart International, and Sam's Club U.S. The Walmart U.S. segment, the company's largest, manages a network of over 4,600 stores and clubs, offering a wide range of merchandise, including grocery, general merchandise, health and wellness, and eCommerce. The Walmart International segment oversees the company's operations in 18 countries outside the U.S., with a focus on providing customers with a seamless omni-channel experience. The Sam's Club U.S. segment operates 600 membership-only warehouse clubs, catering to the wholesale needs of businesses and consumers.
Financial Performance and Ratios
Financials
Walmart's financial performance has been consistently strong, with the company reporting revenues of $674.54 billion and net income of $20.16 billion in fiscal year 2025. The company's gross profit margin stood at 24.1%, while its operating profit margin was 4.4%. Walmart's return on assets (ROA) was 7.9%, and its return on equity (ROE) reached 22.5% during the same period.
For the most recent quarter (Q4 FY 2025), Walmart reported revenue of $180.55 billion, up 5.0% year-over-year, with a net income of $5.25 billion. The increase in revenue was primarily driven by positive comparable sales across the company's segments, including strength in eCommerce.
In terms of geographic performance, the Walmart U.S. segment generated $462.42 billion in net sales, representing 69% of consolidated net sales. The Walmart International segment generated $121.89 billion in net sales, accounting for 18% of consolidated net sales, with notable strength across markets like Mexico, Canada, and China. The Sam's Club U.S. segment generated $90.24 billion in net sales, representing 13% of consolidated net sales.
Liquidity
The company's balance sheet remains solid, with a current ratio of 0.82 and a quick ratio of 0.24 as of fiscal year 2025. Walmart's debt-to-equity ratio stood at 0.66, indicating a moderate level of leverage. The company's free cash flow for fiscal year 2025 was $12.7 billion, providing ample liquidity to fund its operations and strategic initiatives. As of January 31, 2025, Walmart had $9.04 billion in cash and cash equivalents and access to $15 billion in committed credit facilities, further strengthening its liquidity position.
Segment Performance
The Walmart U.S. segment, operating 4,610 stores across all 50 states, Washington D.C., and Puerto Rico, generated net sales of $462.42 billion in fiscal 2025, representing a 4.7% increase from the previous year. Comparable store sales grew by 4.8%, with eCommerce sales contributing approximately 2.9% to comparable sales. The segment's gross profit rate increased 47 basis points, primarily due to managing prices aligned with competitive historic price gaps and growth in higher margin businesses.
The Walmart International segment, with 5,570 stores across 18 countries, reported net sales of $121.89 billion in fiscal 2025, a 6.3% increase from the previous year. This growth was driven by positive comparable sales across international markets and strength in eCommerce, partially offset by negative currency exchange rate fluctuations of $3.2 billion. The segment's gross profit rate increased 20 basis points, driven by improved eCommerce margins and business mix changes.
The Sam's Club U.S. segment, operating 600 membership-only warehouse clubs, generated net sales of $90.24 billion in fiscal 2025, a 4.7% increase from the previous year. Comparable club sales grew by 4.7%, with eCommerce sales contributing approximately 2.3% to comparable sales. The segment's gross profit rate increased 37 basis points, primarily due to improved operational efficiencies and increased margins in fuel.
Omni-Channel Expansion and Technological Advancements
Walmart's success can be largely attributed to its strategic focus on developing a seamless omni-channel experience for its customers. The company has invested heavily in its eCommerce capabilities, with its online sales growing at a rapid pace. In fiscal year 2025, Walmart's eCommerce sales accounted for 18% of its total revenue, up significantly from 7% in fiscal year 2020.
To enhance its digital offering, Walmart has leveraged innovative technologies, such as artificial intelligence (AI) and automation, to optimize its supply chain, improve customer experience, and drive operational efficiency. The company's recent acquisition of VIZIO Holding Corp. further strengthens its advertising and data analytics capabilities, allowing Walmart to better serve its customers and merchants.
Sam's Club, Walmart's membership-based warehouse club, has also embraced digital transformation, offering its members a range of convenient services, including same-day delivery, curbside pickup, and frictionless checkout solutions like Scan & Go and Just Go.
Navigating Geopolitical Challenges and Pandemic Resilience
Walmart's global footprint has exposed the company to various geopolitical and regulatory challenges, particularly in its international operations. In 2021, the company faced scrutiny from Chinese authorities over its attempts to pass on tariff-related costs to local suppliers, highlighting the delicate balance it must strike in navigating complex global trade dynamics.
Despite these challenges, Walmart has demonstrated its resilience during the COVID-19 pandemic, leveraging its omni-channel capabilities to meet the surge in online demand and adapting its operations to ensure the safety of its customers and associates. The company's diversified business model, with its strong presence in essential retail categories like grocery and health and wellness, has contributed to its ability to withstand the pandemic's impact.
Scandals and Legal Issues
Walmart has faced several legal and regulatory challenges in recent years. The company has been involved in opioid-related litigation, including a settlement of $3.3 billion in fiscal 2023. Ongoing opioid-related lawsuits remain a concern for the company.
In 2023, Walmart faced inquiries from the Department of Justice and the Federal Trade Commission related to its money transfer agent services and anti-fraud program. Additionally, in 2024, the company's Flipkart subsidiary in India received a show cause notice from regulators regarding alleged foreign direct investment violations prior to Walmart's acquisition.
Industry Trends and Guidance
The retail industry, including Walmart's key segments, has seen a compound annual growth rate (CAGR) of 6-7% over the past 5 years. Walmart has consistently outperformed its guidance, as evidenced by its strong performance in fiscal year 2025. The company exceeded its sales, profit, and earnings expectations for Q4 FY2025, with consolidated revenue growing 5.2% in constant currency and adjusted operating income up 9.4% in constant currency.
Looking ahead to fiscal year 2026, Walmart expects consolidated net sales growth of approximately 3% to 4%, including the negative impact from lapping leap year and the favorable contribution from the VIZIO acquisition. Operating income is projected to grow faster than sales at 3.5% to 5.5%, including 150 basis points of negative impacts for the VIZIO acquisition related to integration investments and transition costs, as well as from lapping leap year. Adjusted EPS is expected to be in the range of $2.50 to $2.60, which includes a $0.05 per share headwind from currency and a higher effective tax rate compared to the prior year.
For Q1 FY2026, Walmart anticipates consolidated net sales growth of 3% to 4% in constant currency, with operating income projected to grow 0.5% to 2% in constant currency. EPS is expected to be $0.57 to $0.58, including a $0.02 per share headwind from currency and a higher effective tax rate.
Looking Ahead
As Walmart continues to expand its omni-channel offerings and leverage emerging technologies, the company is well-positioned to capitalize on the ongoing shifts in consumer behavior and the evolving retail landscape. The company's strategic investments in areas like supply chain automation, last-mile delivery, and data-driven marketing are expected to drive further improvements in profitability and operational efficiency.
However, Walmart is not without its challenges. The company must navigate an increasingly competitive environment, with both traditional and digital-native retailers vying for market share. Additionally, the company's global presence exposes it to regulatory and geopolitical risks, which it must continue to manage effectively.
Despite these challenges, Walmart's strong financial position, innovative mindset, and customer-centric approach position the company for continued success in the years ahead. As Walmart powers ahead with its omni-channel excellence, investors can look forward to the company's ability to deliver sustainable growth and shareholder value.