Walmart Inc (WMT.DE) QQ3 2025 Results – Revenue Resilience with Margin Discipline Across a $169.6B Quarter; Cash Flow Strength Supports Shareholder Value
Executive Summary
Walmart’s QQ3 2025 performance demonstrates solid top-line momentum and disciplined cost management within a highly competitive discount retail environment. Revenue reached USD 169.6 billion, up 5.46% year over year, supported by a broad store network and ongoing efficiency initiatives. Gross profit stood at USD 42.25 billion with a gross margin of 24.91%, while operating income was USD 6.71 billion for an operating margin of 3.96%. Net income was USD 4.58 billion and diluted EPS USD 0.57, reflecting a dramatic YoY uplift (+910% in net income and +916% in EPS) that appears to be driven by one-time factors or non-operating items in addition to core earnings strength. Free cash flow was USD 0.37 billion for the quarter, while net cash provided by operating activities was USD 6.56 billion, underscoring robust cash generation even as capital expenditure ran at USD 6.19 billion during the period. The balance sheet shows significant scale with total assets of USD 263.4 billion and a net debt position of roughly USD 51.7 billion; liquidity metrics show a current ratio of 0.85, indicating near-term liquidity is solid but watches should be kept on working capital dynamics. The company continues to deploy capital to dividends and buybacks (dividends paid USD 1.67B; net share repurchases USD 0.98B), while maintaining investment in growth initiatives across U.S., International, and Sam’s Club. Valuation metrics imply a premium to peers (P/E around 36x; price to sales ~3.9x), consistent with Walmart’s scale and cash-generating profile. The absence of formal forward guidance in the provided materials limits precision on near-term targets, but the risk/reward remains favorable given resilient demand, cost controls, and a track record of capital returns.
Net Income: USD 4.578B; Net Margin 2.70% (0.0270); YoY net income growth +910% and EPS growth +916% YoY.
Earnings per Share (Diluted): USD 0.57; Weighted Avg Shares: ~8.038B.
Financial Highlights
Key metrics snapshot (USD, unless noted):
- Revenue: USD 169.6B; YoY growth 5.46%; QoQ growth 0.15%.
- Gross Profit: USD 42.248B; Gross Margin 24.91% (0.2491).
- Operating Income: USD 6.708B; Operating Margin 3.96% (0.0396).
- Net Income: USD 4.578B; Net Margin 2.70% (0.0270); YoY net income growth +910% and EPS growth +916% YoY.
- Earnings per Share (Diluted): USD 0.57; Weighted Avg Shares: ~8.038B.
- Cash Flow: Net cash from operating activities USD 6.561B; Capex USD 6.189B; Free Cash Flow USD 0.372B.
- Balance Sheet: Total assets USD 263.399B; total liabilities USD 168.934B; total stockholders’ equity USD 88.108B; cash and cash equivalents USD 10.049B; net debt USD ~51.7B.
- Liquidity/Leverage: Current ratio 0.85; Quick ratio 0.23; Debt to capitalization 0.412; Debt to equity 0.701; Interest coverage 10.85x.
- Returns: ROA 1.74%; ROE 5.19%; ROCE 4.17%; payout ratio 36.4%; dividend yield ~0.25%.
- Valuation (market data snapshot from ratios): P/E ~36.2x; Price-to-Sales ~3.91x; P/BV ~7.52x; Price to FCF ~1,781x (reflecting near-term market expectations). These multiples indicate investors are pricing in Walmart’s scale, margin resilience, and ongoing capital returns, albeit with sensitivity to macro dynamics and consumer spending.
- Free Cash Flow per share: USD 0.046 (as per the provided ratio set).
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
7.52
priceEarningsRatio
36.2
Net Income vs. Revenue
Expense Breakdown
Management Commentary
Notes on transcript availability: The provided data set includes an empty earningsTranscript array. Therefore, no management quotes or call-specific highlight sections could be extracted from the transcript. In a typical QQ3 2025 analysis, investor takeaways would cover: (1) strategic updates on omnichannel growth and grocery acceleration, (2) cost-out actions and productivity improvements, (3) mix shifts between U.S. and International segments, and (4) commentary on macro headwinds such as consumer discretionary pressure and input costs. If a transcript were available, expected themes would likely map to cost discipline, merchandising optimization, and progress toward long-term margin expansion, with forward-looking targets anchored to same-store sales growth, e-commerce penetration, and operating leverage across the store network.
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Forward Guidance
No formal forward guidance or targets were provided in the supplied materials. The absence of explicit guidance limits precise assessment of achievability. In a forward-looking context, investors should monitor: (i) same-store sales performance and customer traffic trends in the U.S. and key international markets; (ii) ongoing cost-reduction programs, supply chain efficiency, and productivity gains that could sustain operating margin improvement; (iii) capital allocation trajectory, including cadence of buybacks and dividend sustainability relative to free cash flow; (iv) currency and macro volatility affecting international operations. Management commentary, if disclosed in full, would clarify any expected range for revenue growth, margin trajectory, and cash flow conversion. Based on the disclosed metrics, the near-term outlook hinges on maintaining robust top-line growth while preserving operating leverage and capital discipline amidst macro uncertainty.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
WMT.DE Focus
24.91%
3.96%
5.19%
36.20%
JNJ.DE
69.00%
23.50%
3.84%
35.91%
PRG.DE
51.00%
23.00%
7.21%
26.48%
CCC3.DE
60.70%
21.20%
10.70%
27.18%
3V64.DE
80.10%
66.70%
12.30%
27.31%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Walmart’s QQ3 2025 results affirm a durable operating platform with meaningful revenue scale and substantial cash flow generation. The quarter shows solid YoY top-line growth (≈5.5%) and margin discipline, with net income and EPS displaying outsized YoY gains driven by factors not fully reconciled in the provided data. The balance sheet demonstrates a strong asset base and manageable leverage, while capital allocation remains a meaningful tailwind for shareholders via dividends and buybacks. However, the near-term liquidity posture—reflected by a current ratio of 0.85—signals the need to monitor working capital and financing flexibility, especially in a volatile macro environment and in a complex international exposure. Relative to peers in consumer staples/discount retail, Walmart’s scale, cost leadership, and margin reiteration position it attractively for value-oriented investors seeking reliable cash flows and defensive earnings, albeit with a premium multiple (P/E ≈ 36x) embedded in the valuation. The absence of explicit forward guidance adds uncertainty around near-term targets, but the Company’s track record of capital returns and efficiency improvements supports a constructive long-term thesis, contingent on continued operating leverage, disciplined capex, and resilient consumer demand.
Key Investment Factors
Growth Potential
Scale advantages across 10,500+ stores and diverse banners support durable revenue generation; potential upside from continued e-commerce integration, omnichannel fulfillment, and membership-style loyalty programs, coupled with Sam’s Club efficiency and cross-sell opportunities across banners.
Profitability Risk
Liquidity pressures reflected by a current ratio below 1, aggressive capital deployment in a high-volume environment, and macro headwinds affecting consumer spend; currency fluctuations and international market exposure; market competition from pure-play e-commerce and wholesale operators; execution risk in international markets and supply chain resilience.
Financial Position
Strong intrinsic cash generation with USD 6.56B operating cash flow and USD 0.37B free cash flow in QQ3 2025; substantial asset base and ongoing capital returns; net debt approximately USD 51.7B with a debt-to-capitalization of 0.412, indicating a conservative leverage stance given scale.
SWOT Analysis
Strengths
Massive scale and store/network density across multiple banners (Walmart US, Walmart International, Sam’s Club) enabling robust price leadership and assortment breadth.
Solid balance sheet with substantial asset base and manageable leverage (debt-to-capitalization ~0.41; interest coverage ~10.85x).
Diverse revenue mix across retail, warehouse clubs, and digital channels supports resilience in varied macro scenarios.
Weaknesses
Current ratio below 1.0 suggesting tighter near-term liquidity metrics despite solid cash flow.
QoQ and YoY margin dynamics require ongoing focus on cost control and supply chain efficiency to sustain mid-single-digit operating margins.
Opportunities
Continued momentum in e-commerce and omnichannel fulfillment to lift revenue per store and incremental online penetration.
International market optimization and cost-to-serve improvements; potential accretion from Sam’s Club membership monetization and cross-banner promotions.
Threats
Competitive intensity from discount retailers and online platforms pressuring pricing and margins.
Macro risks including inflation, consumer confidence, and currency volatility impacting international results.
Logistics and supply chain disruptions could affect cost structure and inventory turns.