Walmart Inc (WMT) reported robust financials for Q3 2025, with revenue reaching $169.59 billion, reflecting a 6.1% growth in constant currency. This growth was driven by strategic investments in eCommerce and core operations, enabling profits to rise by 9.8% faster than sales. Management highlighted that the strong performance across all three segments—Walmart U.S., Walmart International, and Sam's Club—was fueled by increased eCommerce activities and membership income growth. Despite external pressures from hurricanes and a port strike, the company demonstrated resilience through effective inventory management and customer engagement strategies, positioning itself well for continued momentum going into the holiday season.
Key Performance Indicators
Revenue
169.59B
QoQ: 0.15% | YoY:5.46%
Gross Profit
42.25B
24.91% margin
QoQ: -0.65% | YoY:6.63%
Operating Income
6.71B
QoQ: -15.52% | YoY:8.16%
Net Income
4.58B
QoQ: 1.69% | YoY:910.38%
EPS
0.57
QoQ: 1.79% | YoY:916.04%
Revenue Trend
Margin Analysis
Key Insights
Q3 Revenue: **$169.59 billion**, a YoY increase of **6.1%**.
Gross Profit: **$42.24 billion**, with a gross profit margin of **24.9%**.
Operating Income: **$6.71 billion**, reflecting an operating income growth of **9.8%**.
Net Income: **$4.58 billion**, a significant increase of **910.38% YoY**, primarily attributed to a lower comparative base in the previous year.
Net Cash from operating activities: **$6.56 billion**.
Financial Highlights
Revenue & Profitability:
- Q3 Revenue: $169.59 billion, a YoY increase of 6.1%.
- Gross Profit: $42.24 billion, with a gross profit margin of 24.9%.
- Operating Income: $6.71 billion, reflecting an operating income growth of 9.8%.
- Net Income: $4.58 billion, a significant increase of 910.38% YoY, primarily attributed to a lower comparative base in the previous year.
Cash Flow:
- Net Cash from operating activities: $6.56 billion.
- Free Cash Flow: $372 million.
Balance Sheet:
- Cash and Equivalents: $10.05 billion.
- Total Assets: $263.40 billion.
- Total Liabilities: $168.93 billion.
- Total Shareholders' Equity: $88.11 billion.
Key Ratios:
- Current Ratio: 0.848.
- Debt-to-Equity Ratio: 0.701.
- Return on Equity: 5.19%.
Growth drivers included a 27% rise in eCommerce sales and a 9.25% increase in adjusted EPS to $0.58. Management has raised its full-year sales growth guidance to 4.8% - 5.1%, reflecting confidence in ongoing operational momentum.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
169.59B
5.46%
0.15%
Gross Profit
42.25B
6.63%
-0.65%
Operating Income
6.71B
8.16%
-15.52%
Net Income
4.58B
910.38%
1.69%
EPS
0.57
916.04%
1.79%
Key Financial Ratios
currentRatio
0.85
grossProfitMargin
24.9%
operatingProfitMargin
3.96%
netProfitMargin
2.7%
returnOnAssets
1.74%
returnOnEquity
5.19%
debtEquityRatio
0.7
operatingCashFlowPerShare
$0.82
freeCashFlowPerShare
$0.05
dividendPayoutRatio
36.4%
priceToBookRatio
7.48
priceEarningsRatio
35.98
Net Income vs. Revenue
Expense Breakdown
Management Commentary
Strategic Insights:
- Doug McMillon (CEO) emphasized, "Our associates delivered another strong quarter continuing our momentum... sales grew 6.1% in constant currency and profit was up 9.8%." Management lauded the company’s focus on eCommerce and convenience as pivotal to capturing market share.
- John David Rainey (CFO) noted, "We're encouraged by the steady momentum... with all three operating segments outperforming our expectations... comp sales increased 5.3%, including eCommerce growth of 22%."
Market Conditions:
- Management acknowledged challenges from external factors like hurricanes which temporarily impacted operations but praised the team’s effective response, stating, "We delivered on our financial framework despite the noise from these events."
"I'm excited about how our associates are learning and changing the way they think and work." - Doug McMillon, CEO
— Doug McMillon
"Our value proposition is resonating with customers and that's why you're seeing us gain share." - John David Rainey, CFO
— John David Rainey
Forward Guidance
Walmart management has indicated an optimistic outlook, raising the full-year guidance for sales growth to **4.8% - 5.1%** and projecting operating income growth at **8.5% - 9.25%**. The company’s focus remains on leveraging its strong market position through enhancements in customer experience, particularly via increased eCommerce and omnichannel strategies. This aligns with management’s commitment to evaluate investments in technology and operations to ensure sustained profitability while adapting to consumer demands. Investors should monitor shifts in market conditions and the potential impact of competitive actions, particularly as holiday shopping approaches.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
WMT Focus
24.91%
3.96%
5.19%
35.98%
COST
12.50%
3.75%
7.72%
51.17%
DLTR
31.00%
4.41%
3.06%
15.34%
BJ
19.10%
4.50%
8.84%
18.16%
BIG
36.40%
1.92%
1.51%
6.62%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Walmart’s solid Q3 performance, bolstered by strategic investments in eCommerce and operational efficiency, demonstrates the retailer's resilience and adaptability in a dynamic market. With a strong balance sheet and bolstered guidance, Walmart presents a compelling investment opportunity. However, investors should remain cognizant of the competitive landscape and macroeconomic factors potentially impacting consumer behavior as they position themselves for the upcoming fiscal quarters.
Key Investment Factors
Growth Potential
Walmart's investments in eCommerce, along with its competitive pricing and broad product offerings, present significant growth opportunities. The continued rise in eCommerce sales and membership growth, especially in higher-income demographics, may lead to sustained revenue and profit expansion.
Profitability Risk
Potential risks include external economic pressures, competitive pricing strategies from competitors, and operational disruption due to unforeseen events such as natural disasters. Maintaining customer trust amid rising inflation is crucial to preserve market share.
Financial Position
Walmart’s balance sheet remains strong with significant cash reserves and manageable debt levels, presenting a favorable position for ongoing capital investments. The company’s ability to generate consistent free cash flow further supports its operational expansions.
SWOT Analysis
Strengths
Leading market position in the discount retail sector
Diverse revenue streams including eCommerce, advertising, and memberships
Strong brand loyalty and recognition among consumers
Weaknesses
Current ratio indicates potential liquidity concerns
High operational expenses potentially impacting margins during eCommerce transition
Opportunities
Expansion of eCommerce and digital services, particularly in international markets
Growth in membership income and enhanced loyalty programs
Threats
Intense competition across retail sectors and from digital-native companies
Economic downturns affecting consumer spending habits, especially in discretionary categories