Walmart(WMT) - 2026 Q1 - Quarterly Report

Part I. Financial Information Financial Statements For the quarter ended April 30, 2025, Walmart's total revenues grew 2.5% year-over-year to $165.6 billion, while consolidated net income declined to $4.6 billion from $5.3 billion, primarily due to net losses on equity investments, resulting in a diluted EPS of $0.56, down from $0.63 in the prior year; the balance sheet shows total assets increased to $262.4 billion, cash flow from operations was strong at $5.4 billion, and key notes highlight $4.0 billion in new long-term debt and ongoing significant legal contingencies, particularly related to opioids Consolidated Statements of Income Q1 FY2026 vs Q1 FY2025 Income Statement Highlights | Financial Metric | Q1 FY2026 (ended Apr 30, 2025) | Q1 FY2025 (ended Apr 30, 2024) | YoY Change | | :--- | :--- | :--- | :--- | | Total Revenues | $165,609 million | $161,508 million | +2.5% | | Operating Income | $7,135 million | $6,841 million | +4.3% | | Other (gains) and losses | $597 million (loss) | $(794) million (gain) | - | | Consolidated Net Income | $4,639 million | $5,307 million | -12.6% | | Diluted EPS | $0.56 | $0.63 | -11.1% | | Dividends Declared per Share | $0.94 | $0.83 | +13.3% | Consolidated Balance Sheets Balance Sheet Highlights (as of April 30) | Balance Sheet Item | April 30, 2025 | April 30, 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Cash and cash equivalents | $9,311 million | $9,405 million | -1.0% | | Inventories | $57,467 million | $55,382 million | +3.8% | | Total Assets | $262,372 million | $254,054 million | +3.3% | | Accounts payable | $57,700 million | $56,071 million | +2.9% | | Long-term debt (incl. current) | $40,605 million | $37,793 million | +7.4% | | Total Liabilities | $172,024 million | $165,837 million | +3.7% | | Total Shareholders' Equity | $90,341 million | $88,073 million | +2.6% | Consolidated Statements of Cash Flows Cash Flow Summary (Three Months Ended April 30) | Cash Flow Activity | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | Net cash provided by operating activities | $5,411 million | $4,249 million | +$1,162 million | | Net cash used in investing activities | ($5,093) million | ($4,409) million | +$684 million | | Net cash provided by (used in) financing activities | $8 million | ($321) million | +$329 million | Note 4: Debt and Financing - In April 2025, the company renewed and extended credit facilities totaling $15.0 billion, consisting of a $10.0 billion 364-day facility and a $5.0 billion five-year facility, all of which were undrawn as of April 30, 2025[30] New Long-Term Debt Issuances (April 2025) | Principal Amount | Maturity Date | Interest Rate | Net Proceeds | | :--- | :--- | :--- | :--- | | $750 million | April 2027 | Floating | $749 million | | $750 million | April 2027 | 4.100% | $748 million | | $1,000 million | April 2030 | 4.350% | $993 million | | $1,500 million | April 2035 | 4.900% | $1,493 million | | Total | | | $3,983 million | Note 6: Legal Contingencies - The company continues to vigorously defend against numerous opioid-related lawsuits not covered by the previous $3.3 billion settlement, including cases in the national multidistrict litigation (MDL), and cannot reasonably estimate any potential loss[42][44] - The DOJ's civil complaint regarding opioid dispensing and distribution practices remains pending, with a trial scheduled for November 2027[48] - Other significant legal matters include equal value claims against former subsidiary Asda, investigations by the FTC and DOJ into money transfer services, and antitrust matters in Mexico and India[54][56][61][63] Note 7: Segment and Revenue Details Segment Performance (Three Months Ended April 30, 2025) | Segment | Total Revenues | Operating Income | YoY Op. Income Change | | :--- | :--- | :--- | :--- | | Walmart U.S. | $112.8 billion | $5.7 billion | +7.0% | | Walmart International | $30.1 billion | $1.3 billion | -17.5% | | Sam's Club U.S. | $22.7 billion | $0.7 billion | +11.5% | eCommerce Net Sales (Three Months Ended April 30) | Segment | 2025 | 2024 | YoY Growth | | :--- | :--- | :--- | :--- | | Walmart U.S. | $21.4 billion | $17.6 billion | +21.6% | | Walmart International | $7.7 billion | $6.4 billion | +20.3% | | Sam's Club U.S. | $3.3 billion | $2.6 billion | +26.9% | Management's Discussion and Analysis (MD&A) Management attributes performance to strong U.S. comparable sales growth of 3.0%, driven by robust eCommerce and strength in grocery and health & wellness, with the consolidated gross profit rate improving by 12 basis points and operating income growing 4.3%; the company is focused on its strategic priorities of growth, margin improvement, and returns, as evidenced by increased capital expenditures in automation and stores, a 13% dividend increase, and $4.6 billion in share repurchases during the quarter Company Performance Metrics U.S. Comparable Sales Growth (Three Months Ended April 30, 2025) | Segment | Comparable Sales (incl. Fuel) | eCommerce Contribution | | :--- | :--- | :--- | | Walmart U.S. | +3.1% | +3.4% | | Sam's Club U.S. | +2.8% | +3.3% | - Gross profit rate increased by 12 basis points, primarily due to disciplined inventory management and growth in higher-margin businesses at Walmart U.S[81] Return on Investment (ROI) and Free Cash Flow | Metric | Trailing 12 Months Ended Apr 30, 2025 | Trailing 12 Months Ended Apr 30, 2024 | | :--- | :--- | :--- | | ROI (Non-GAAP) | 15.3% | 15.0% | | ROA (GAAP) | 7.5% | 7.9% | | Free Cash Flow (Q1) | $425 million | ($427) million | Results of Operations by Segment - Walmart U.S.: Operating income rose 7.0% to $5.7 billion, net sales grew 3.2%, driven by 3.1% comparable sales, and gross profit rate increased 25 basis points from disciplined inventory management and growth in higher-margin businesses[101][103][105] - Walmart International: Operating income fell 17.5% to $1.3 billion, net sales were down 0.3%, heavily impacted by a $2.4 billion negative currency effect, and gross profit rate declined 66 basis points due to channel and format mix shifts[106][107][109] - Sam's Club U.S.: Operating income grew 11.5% to $686 million, net sales increased 2.9%, with comparable sales up 2.8%, and membership income grew a strong 8.2%, reflecting growth in the member base[110][111][112] Liquidity and Capital Resources - Net cash from operating activities increased to $5.4 billion for the quarter, up from $4.2 billion in the prior year, due to higher operating income and timing of payments[114] - The company increased its annual dividend for fiscal 2026 by 13% to $0.94 per share[121] Share Repurchases (Q1 FY2026) | Metric | Value | | :--- | :--- | | Total Amount Paid | $4,555 million | | Total Shares Repurchased | 50.4 million | | Average Price Paid | $90.35 | Market Risk The company states there have been no material changes to its market risks, which primarily relate to interest rates, currency exchange rates, and the fair value of equity investments, since its last Annual Report on Form 10-K - There were no material changes to market risks from those disclosed in the Annual Report for the fiscal year ended January 31, 2025; key risks remain changes in interest rates, currency exchange rates, and fair value of certain equity investments[128] Controls and Procedures Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of April 30, 2025, with no significant changes to internal controls over financial reporting during the quarter - Based on an evaluation, the CEO and CFO concluded that the company's disclosure controls and procedures are effective to provide reasonable assurance of timely and accurate reporting[131] - No significant changes in the company's internal control over financial reporting occurred during the quarter that materially affected, or are reasonably likely to materially affect, these controls[131] Part II. Other Information Legal Proceedings This section provides supplemental details and case citations for significant legal matters discussed in the financial notes, including ongoing opioid litigation, Asda equal value claims, and money transfer services litigation; it also discloses a new environmental matter with the EPA regarding alleged Clean Air Act violations, with potential penalties exceeding $1 million - Provides supplemental case citations for major legal proceedings, including the In re National Prescription Opiate Litigation (MDL No. 2804) and the DOJ's civil litigation against the company[134][135] - In October 2023, the EPA issued a Finding of Violation alleging violations of the Clean Air Act related to the company's refrigeration leak detection and repair program; the EPA could seek penalties exceeding $1 million[142] Risk Factors The company reports that no material changes have occurred in the risk factors previously disclosed in its Annual Report on Form 10-K for the fiscal year ended January 31, 2025 - No material change in the risk factors discussed in the Form 10-K for the fiscal year ended January 31, 2025, has occurred[143] Share Repurchases During the quarter, Walmart repurchased 50.9 million shares for approximately $4.6 billion; as of April 30, 2025, $7.5 billion remained available for future repurchases under the existing program Share Repurchase Activity (Q1 FY2026, Trade Date Basis) | Fiscal Period | Shares Purchased | Average Price Paid | Total Value (billions) | | :--- | :--- | :--- | :--- | | Feb 2025 | 6,672,891 | $99.20 | ~$0.7 | | Mar 2025 | 23,690,359 | $87.66 | ~$2.1 | | Apr 2025 | 20,502,718 | $90.67 | ~$1.9 | | Total | 50,865,968 | | ~$4.6 | - As of April 30, 2025, authorization for $7.5 billion of share repurchases remained under the share repurchase program approved in November 2022[144] Other Information This section discloses that in March 2025, CEO C. Douglas McMillon and Walmart U.S. CEO John Furner both adopted Rule 10b5-1 stock trading plans; the section also contains the standard cautionary statement regarding forward-looking statements - On March 17, 2025, CEO C. Douglas McMillon and Walmart U.S. CEO John Furner each entered into a stock trading plan designed to comply with Rule 10b5-1[146][147]