In a November 19^th release, Walmart Inc. (WMT) posted financial results for Q3 of Fiscal 2025 ending October 31^st 2024. All U.S. omni-channel retailers are subject to the same pressures from increased costs for goods, transport and labor in a competitive environment with most consumer demographics and especially lower income earners concerned over expenditure. As a multinational company, Walmart faces additional risks associated with currency fluctuation, geopolitical events and adverse policies by regulators in host-nations. Walmart serves as a bellwether for U.S retail combining groceries, clothing, electronics, drugs, toiletries and household necessities.

For the 3^rd quarter of FY 2025 net income was $4,577 million on total revenue of $169,588 million that beat consensus estimates on revenue and earnings. Walmart generated a profit margin of 2.7 percent for the quarter.  Comparable figures for Q3 FY 2024 ending October 31^st 2023, were net income of $453 million on total revenue of $160,804 million with a profit margin of 0.3 percent due to a non-recurring charge of $4,750 million. Diluted EPS increased from $0.06 for Q3 FY 2024 to $0.57 for the most recent quarter.

Comparing Q3 FY 2025 with the corresponding quarter of the previous year, revenue was up 5.5 percent; comparable store sales up 5.5 percent for the U.S.; gross margin rose from 24.0 percent to 24.2 percent; operating margin increased from 3.9 percent to 4.0 percent for the most recent quarter. Global E-commerce sales grew by 27 percent and global inventory was down 1.0 percent and 0.6 percent for the U.S.

In commenting on Q3 results, in the Investors’ Call, Walmart CFO John David Rainey stated “Share gains in the third quarter, in both transaction counts and unit volumes, were primarily driven by upper-income households. We’re broadening our assortment, improving customer experience, and earning their trust, while seeing share gains as a result. We’re also realizing the benefits from the investments we’ve made in our core omni-retail business and seeing improved profitability with newer businesses.”

He added, “E-commerce remained strong, with Walmart posting a 22 percent increase year over year. Store-fulfilled delivery grew nearly 50 percent and surpassed a $2.5 billion monthly run rate. This marked the 12^th consecutive month that deliveries exceeded $2 billion. Walmart Connect grew by 26% year over year, and membership income was up by double digits”.

Rainey concluded “U.S. customers remain resilient, with behaviors largely consistent over the past four to six quarters. They continue to seek value to maximize their budgets while also choosing convenient options to save time.”

Forward guidance for FY 2025 was adjusted upwards above the upper end of previously stated ranges including:- A 4.8 to 5.1 percent increase in net revenue; An increase in adjusted operating income of 8.5 to 9.3 percent, and an adjusted EPS of $2.42 to $2.47 Capital expenditure will be equivalent to 3.0 to 3.5 percent of net sales.

For Q3 FY 2025 segment results comprised:-

• Walmart US: Net sales of $114,900 million, up 5.0 percent over Q3 FY 2024. Operating income $5,400 million with strong gains in groceries and general merchandise. Comparable same-store sales were up 5.3 percent (excluding fuel). Transactions were up 3.1 percent and ticket was 2.1 percent higher. E-commerce, was up 22 percent over the corresponding quarter of FY 2024. Inventory declined approximately 0.6 percent.
• International: Net sales of $30,300 million, up 8.0 percent. Operating income was $1,200 million, up 7.8 percent. Growth in E-commerce, 43 percent over the corresponding quarter of FY 2024.
• Sam’s Club U.S.: Net sales of $22,900 million, up 3.9 percent excluding fuel. Operating income was $600 million. Comparable same-store sales were up 7.0 percent. Membership revenue grew 15.0 percent. Growth in E-commerce, increased 26 percent over the corresponding quarter of FY 2023, attributed to curbside pick-up service and delivery.

Walmart operates more than 10,500 stores worldwide of which 5,400 are in the U.S. including 600 Sam’s Club warehouses. Walmart trades under 46 banners in 19 nations and employs 2.1 million.

On October 31^st 2024, Walmart posted assets of $263,399 million including goodwill of $27,942 million. Long-term debt and lease obligations amounted to $52,628 million. The Company had an intraday market capitalization of $675,860 million on November 19^th. WMT trades with a forward P/E of 30.9 and has ranged over a 52-week period from $49.85 to $88.29 with a 50-day moving average of $81.42.  Twelve-month trailing operating margin was 4.7 percent and profit margin 2.3 percent.  Return on assets over the past twelve months was 7.0 percent with a return on equity 18.5 percent. At close of trading on November 18^th pre-release, WMT was priced at $84.11. On November 19^th WMT opened post-release at $86.17, up 2.5 percent and closed at $86.89.