Walmart Inc reported a robust Q2 2025 performance, achieving a revenue of $169.34 billion, representing a 4.77% year-on-year increase. The company also experienced strong profit growth, with net income reaching $4.50 billion, although diluted EPS saw a reduction of 42.86% to $0.56 due to elevated prior-year performance. Management indicated that the results were driven by broad-based growth across all operating segments, particularly in e-commerce and international markets, demonstrating Walmart's effective execution of its value-based strategy amidst a challenging economic backdrop. CEO Doug McMillon noted the successful implementation of technology and automation in operations, enhancing customer experience and operational efficiency.
### Profitability
- Net Income: $4.50 billion
- Net Income Ratio: 2.58%
- Operating Income: $7.94 billion
- Operating Income Growth: 8.53% YoY
### EPS
- Diluted EPS: $0.56
- EPS Decrease YoY: 42.86% due to elevated year-ago performance.
### Cash Flow and Balance Sheet
- Net Cash Provided by Operating Activities: $12.11 billion
- Free Cash Flow: $6.28 billion
- Cash at Period End: $8.81 billion
- Total Debt: $61.31 billion
- Total Assets: $254.44 billion
- Debt to Equity Ratio: 0.73
### Other Key Ratios
- Return on Assets (ROA): 1.77%
- Return on Equity (ROE): 5.33%
Walmart's ability to manage inventory effectively and control operating expenses has led to gross profit margins expanding by 43 basis points in the quarter, underscoring the company’s focus on pricing strategy and competitive advantage.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
169.34B
4.77%
4.85%
Gross Profit
42.53B
6.90%
6.11%
Operating Income
7.94B
8.53%
16.06%
Net Income
4.50B
-42.96%
-11.81%
EPS
0.56
-42.86%
-11.11%
Key Financial Ratios
currentRatio
0.8
grossProfitMargin
25.1%
operatingProfitMargin
4.69%
netProfitMargin
2.66%
returnOnAssets
1.77%
returnOnEquity
5.33%
debtEquityRatio
0.73
operatingCashFlowPerShare
$1.51
freeCashFlowPerShare
$0.78
dividendPayoutRatio
37%
priceToBookRatio
6.54
priceEarningsRatio
30.67
Net Income vs. Revenue
Expense Breakdown
Management Commentary
### Management Insight on Strategy and Performance
- Doug McMillon (CEO) highlighted: "The strength we saw for the quarter was broad-based. Our business outside the U.S. continues to lift the total company in terms of sales and profit growth."
- John David Rainey (CFO) commented: "Q2 sales, operating income, and EPS all exceeded the top end of our guided ranges. Second quarter total net sales growth was 4.9% on a constant currency basis, with all three operating segments outperforming our expectations."
- Discussion around e-commerce speeds and growth trends: "Global e-commerce losses continue to narrow, most notably in our Walmart U.S. and Flipkart businesses."
- Emphasis on customer value and technology: "We're leveraging Generative AI to improve the customer, member, and associate experience."
"Convenience matters, and we're uniquely positioned to provide it."
— Doug McMillon
"We're seeing continued sales growth, share gains, and higher gross margins."
— John David Rainey
Forward Guidance
Walmart is raising its full-year guidance based on strong first-half results. For FY 2025, the company anticipates sales growth of 3.75% to 4.75% and operating income growth of 6.5% to 8%, significantly above previous estimates. The management remains cautiously optimistic about the second half of the year, expecting consistent consumer behavior as indicated by current trends. The focus will be on maintaining profitable growth, enhancing e-commerce capabilities, and driving overall market share amidst economic uncertainties.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
WMT Focus
25.11%
4.69%
5.33%
30.67%
COST
12.50%
3.53%
8.40%
46.09%
DLTR
30.10%
2.75%
1.79%
40.41%
BJ
18.40%
3.91%
8.76%
19.83%
BIG
34.90%
-21.20%
1.54%
-3.00%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Walmart's strategic focus on technology, convenience, and value positions it well for future growth, particularly as consumer behavior continues to shift towards e-commerce. The positive financial metrics, combined with a proactive approach to managing costs and enhancing inventory, suggest a healthy investment outlook. However, investors should be mindful of external economic factors and monitor competitive dynamics within the sector.
Key Investment Factors
Growth Potential
With strong global demand, a focus on e-commerce innovation, particularly in leveraging AI technology, and sustained improvements in customer experience, Walmart presents significant growth opportunities. Its diverse revenue streams and strategic investments in international markets bolster this outlook.
Profitability Risk
Potential risks include macroeconomic volatility that could impact consumer spending, fluctuating supply chain costs, and intense competition from both traditional retailers and e-commerce platforms.
Financial Position
Walmart's financial position remains strong with a solid asset base of $254.44 billion, manageable debt levels, and robust cash flow generation supporting investment in growth initiatives.
SWOT Analysis
Strengths
Leading market position in discount retail;
Strong brand recognition and customer loyalty;
Robust supply chain and logistics capabilities;
Effective use of technology and AI to enhance operations.
Weaknesses
Dependence on U.S. market for a significant portion of revenue;
Lower profitability margins compared to competitors like Costco;
Challenges in rapidly adapting to evolving consumer preferences.
Opportunities
Expansion in e-commerce and digital platforms;
Growth in international markets, particularly in emerging economies like India;
Increasing penetration of private label products.
Threats
Intense competition from online and brick-and-mortar retailers;
Economic downturns affecting consumer spending;
Regulatory challenges and changes in trade policies that could impact operations.
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