Walmart - $WMT - Earnings Analysis: Strong revenue growth of 4.1% and operating income growing faster at 8.3%.
Business Model
Walmart generates revenue through net sales, membership and other income.
Revenue Sources
- Net sales from Walmart U.S., Walmart International, and Sam's Club U.S.
- Membership and other income, including membership fees, rental income, recycling income, and gift card breakage.
Income Statement Analysis
- Net sales increased by 4.0% due to broad-based sales momentum across merchandise categories and strong seasonal sales.
- Membership and other income increased by 17.0% driven by growth in membership income.
- Operating income increased by 8.3% reflecting strong sales growth, higher gross margins, and membership income.
Balance Sheet Analysis
- Cash and cash equivalents decreased from $9.9 billion to $9.0 billion.
- Total assets increased from $252.4 billion to $260.8 billion primarily due to an increase in property and equipment.
- Total shareholders’ equity increased from $90.3 billion to $97.4 billion driven by retained earnings.
Cash Flow Analysis
- Net cash provided by operating activities increased from $35.7 billion to $36.4 billion.
- Net cash used in investing activities remained relatively stable.
- Net cash used in financing activities increased from $13.4 billion to $14.8 billion driven by higher purchase of company stock
Capital Allocation
Walmart increased its dividend by 13% and repurchased shares during FY25. Capital expenditures remained a focus, particularly in supply chain optimization, store remodels, and international expansion.
Management Commentary
Our team finished the year with another quarter of strong results.
We have momentum driven by our low prices, a growing assortment, and an eCommerce business driven by faster delivery times.
We’re gaining market share, our top line is healthy, and we’re in great shape with inventory.
Overall Sentiment: Positive, emphasizing strong financial performance and strategic progress.
Disclaimer: This report is for informational purposes only and not investment advice. The analysis is based on limited information and subject to change. Investing in securities involves risks, including potential loss of principal. Past performance doesn't guarantee future results. Always conduct your own research, understand the risks, and consult a financial professional before making investment decisions.