Part I. [Financial Information](index=3&type=section&id=Part%20I.%20Financial%20Information) [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) 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](index=3&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) 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](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) 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](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) 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](index=10&type=section&id=Note%204.%20Short-term%20Borrowings%20and%20Long-term%20Debt) - 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](index=30&type=chunk) 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](index=11&type=section&id=Note%206.%20Contingencies) - 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](index=42&type=chunk)[44](index=44&type=chunk) - The DOJ's civil complaint regarding opioid dispensing and distribution practices remains pending, with a trial scheduled for November 2027[48](index=48&type=chunk) - 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](index=54&type=chunk)[56](index=56&type=chunk)[61](index=61&type=chunk)[63](index=63&type=chunk) [Note 7: Segment and Revenue Details](index=14&type=section&id=Note%207.%20Segments%20and%20Disaggregated%20Revenue) 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)](index=18&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) 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](index=18&type=section&id=Company%20Performance%20Metrics) 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](index=81&type=chunk) 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](index=22&type=section&id=Results%20of%20Operations%20by%20Segment) - **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](index=101&type=chunk)[103](index=103&type=chunk)[105](index=105&type=chunk) - **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](index=106&type=chunk)[107](index=107&type=chunk)[109](index=109&type=chunk) - **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](index=110&type=chunk)[111](index=111&type=chunk)[112](index=112&type=chunk) [Liquidity and Capital Resources](index=25&type=section&id=Liquidity%20and%20Capital%20Resources) - 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](index=114&type=chunk) - The company increased its annual dividend for fiscal 2026 by **13%** to **$0.94 per share**[121](index=121&type=chunk) 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](index=27&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) 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](index=128&type=chunk) [Controls and Procedures](index=28&type=section&id=Item%204.%20Controls%20and%20Procedures) 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](index=131&type=chunk) - 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](index=131&type=chunk) Part II. [Other Information](index=29&type=section&id=Part%20II.%20Other%20Information) [Legal Proceedings](index=29&type=section&id=Item%201.%20Legal%20Proceedings) 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](index=134&type=chunk)[135](index=135&type=chunk) - 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](index=142&type=chunk) [Risk Factors](index=30&type=section&id=Item%201A.%20Risk%20Factors) 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](index=143&type=chunk) [Share Repurchases](index=30&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) 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](index=144&type=chunk) [Other Information](index=30&type=section&id=Item%205.%20Other%20Information) 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](index=146&type=chunk)[147](index=147&type=chunk)

Core Insights - Walmart is expanding its drone delivery service to three additional states, aiming to compete with Amazon for the fastest delivery service [1] - The partnership with Google's Wing will enable Walmart to launch drone delivery at 100 stores across cities including Atlanta, Charlotte, Houston, Orlando, and Tampa, building on existing operations in Arkansas and Texas [2] - Walmart claims to be the first retailer to scale drone delivery across five states, emphasizing its goal to lead in tech-enabled retail [2] Delivery Service Details - Wing's drones can operate beyond visual line of sight, covering a range of up to 6 miles from the store, with delivery times under 30 minutes [3] - Walmart has conducted over 150,000 drone deliveries since 2021 in collaboration with Wing and Zipline, which initially partnered with Walmart for deliveries in Arkansas [6] - In addition to drone delivery, Walmart has launched other fast delivery options, including Express Delivery, Late-Night Delivery, and InHome Delivery [8] Competitive Landscape - Amazon has also been expanding its drone delivery services, recently deploying them in College Station, Texas, and the West Valley of Phoenix, Arizona [9] - Amazon reported record Prime delivery speeds in early 2024, with over 2 billion items delivered the same or next day to Prime members globally [10]

Core Insights - Walmart's success is driven by its strong omnichannel strategy, integrating physical stores with digital shopping, leading to a 22% growth in global e-commerce sales in Q1 FY26 [1][7] E-commerce Performance - In the U.S., e-commerce sales increased by 21%, supported by store-fulfilled pickup and delivery, with international sales rising by 20% [2] - Sam's Club U.S. saw a significant 27% increase in e-commerce sales, driven by Club-fulfilled deliveries and pickup services [2] Digital Business Expansion - Walmart is enhancing its supply chain and expanding digital services like Walmart GoLocal, Walmart Connect, Scintilla, Walmart+, and Walmart Fulfillment Services [3] - The company has made strategic investments, including acquiring a stake in Flipkart and owning most of PhonePe, contributing to its growth in online grocery shopping [3] Competitive Landscape - Amazon remains the leading player in e-commerce, focusing on speed and customer loyalty through its Prime program, but Walmart is leveraging its store network to compete effectively, especially in groceries [4] - Target's e-commerce growth is attributed to its focus on convenience, with online sales contributing approximately 20% to its total revenues in Q1 2025 [5] Financial Performance - Walmart's shares have increased by approximately 10.6% year-to-date, slightly below the industry's growth of 10.8% [6] - The company trades at a forward price-to-earnings ratio of 37.08X, above the industry average of 33.95X [8] Earnings Estimates - The Zacks Consensus Estimate for Walmart's 2025 earnings indicates a year-over-year growth of 3.2%, with an 11.6% increase expected in 2026 [9]

Core Point - Walmart is expanding its drone delivery service to 100 stores across five states, aiming to enhance convenience and compete with rivals like Amazon [1][3]. Group 1: Expansion Plans - The drone delivery service will be launched in Atlanta, Charlotte, Houston, Orlando, and Tampa within the next year [1]. - With this expansion, Walmart's drone deliveries will be available in Arkansas, Florida, Georgia, North Carolina, and Texas [1]. Group 2: Delivery Process - Customers can request deliveries through the Wing app, with drones operating within a six-mile range from stores [2]. - Deliveries are completed in 30 minutes or less, with popular items including eggs, ice cream, and pet food [5]. Group 3: Customer Feedback and Usage - Customer feedback indicates a strong demand for expanded drone delivery services, particularly for urgent items [4]. - Over 50% of the 150,000 items available at Walmart locations can be delivered by drone [5]. Group 4: Historical Context and Challenges - Walmart previously announced plans to reach 4 million households with drone deliveries but faced challenges in execution [6]. - The company has completed over 150,000 drone deliveries since 2021, indicating modest progress compared to its initial goals [7]. Group 5: Competitive Landscape - Amazon is also pursuing drone delivery but has faced its own challenges, aiming to deliver 500 million packages annually by the end of the decade [7][8]. - Walmart has tested drone deliveries in various locations, including Northwest Arkansas and the Dallas-Fort Worth area, with multiple operators involved [9]. Group 6: Future Outlook - Walmart aims to integrate drone deliveries into a broader ecosystem of delivery options, emphasizing flexibility and convenience [10]. - The company is testing a drone delivery option within its app, with costs of $19.99 or free for Walmart+ members [10].

Group 1 - Wing, the on-demand drone delivery company owned by Alphabet, is expanding its operations with Walmart to over 100 stores in five new cities: Atlanta, Charlotte, Houston, Orlando, and Tampa, in addition to the existing market in Dallas-Fort Worth [1][2] - Walmart's senior vice president emphasized that drone delivery is a key part of its strategy to redefine retail and enhance customer convenience [2] - The expansion represents a nearly five-fold increase in Wing's operations with Walmart, moving from a pilot program that initially reached about 60,000 homes to 18 Walmart Supercenters in the Dallas-Fort Worth area [3] Group 2 - Wing's CEO stated that the company is transitioning from the pilot phase to scaling its business, indicating a significant growth opportunity [4] - The successful pilot program in Dallas-Fort Worth has informed Wing's strategy for expanding drone delivery in the retail sector [6] - Wing is focused on scaling its deliveries while managing expenses, aiming to build a business around small, lightweight, automated drones [7][8] Group 3 - Wing is also entering the restaurant food delivery market through a partnership with DoorDash, which began in 2022 and has expanded to multiple locations [9]

Financial Data and Key Metrics Changes - Total revenue grew by 5.1% to $681 billion, and operating income increased by 8.6% [7] - Operating cash flow was strong at $36.4 billion, with return on investment improving by 50 basis points [7] Business Segment Data and Key Metrics Changes - All three business segments performed well, with a focus on growing sales and profits while investing in associates and technology [8] - The average wage for hourly associates in the US has risen to over $18 per hour, which is 28% higher than five years ago [9] Market Data and Key Metrics Changes - In the US, Walmart aims to reach 95% of the population with delivery in under three hours by the end of the year [12] - Same-day pharmacy delivery is now available in the US, and Sam's Club offers same and next-day shipping [12] Company Strategy and Development Direction - The company is committed to being a tech-powered, omnichannel retailer focused on innovation and convenience [11] - Walmart continues to remodel stores and open new ones while making significant community contributions, including donating 752 million pounds of food [13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strategic direction and ability to create long-term sustainable value for shareholders [4] - The company is focused on maintaining low prices while investing in associate wages and technology to enhance customer value [66][74] Other Important Information - Walmart's commitment to diversity and inclusion was reiterated, with ongoing support for the LGBTQ community [69] - The company reported that it has improved its e-commerce profitability and is increasingly recognized for convenience [66] Q&A Session Summary Question: Did anything about Walmart's steady stock price rise over the last year surprise you? - Management emphasized that the focus is on building a stronger business over time, with strategic investments yielding positive results [65][66] Question: Do you still support the LGBTQ community, and do you still sell merchandise for pride month? - Management confirmed ongoing support for the LGBTQ community and a commitment to inclusivity [69][70] Question: Can we expect to see a continued focus on political neutrality and fiduciary duty at Walmart? - Management reiterated the goal of serving a diverse customer base and maintaining a focus on business rather than politics [72] Question: How is Walmart managing increased costs due to tariffs? - Management highlighted ongoing investments in associate wages and efforts to keep prices low despite dynamic pricing pressures [73][74] Question: What is management's opinion on proxy advisers like ISS and Glass Lewis? - Management stated that they take input from various stakeholders, including proxy advisers, but will focus on what is best for the company [77]

Core Viewpoint - Ibotta, Inc. is facing a class action lawsuit due to alleged misleading statements in its registration statement related to its IPO on April 18, 2024, particularly concerning its contract with Kroger [1][3][4] Group 1: Legal Action - The Portnoy Law Firm is advising Ibotta investors about a class action lawsuit for those who purchased securities linked to the company's IPO [1] - Investors have until June 16, 2025, to file a lead plaintiff motion [1] Group 2: Allegations - The complaint claims that the registration statement failed to disclose the at-will nature of Ibotta's contract with Kroger, which could be terminated at any time without notice [3] - The registration statement provided details about Ibotta's contract with Walmart but omitted warnings regarding the risks associated with the Kroger agreement [3] Group 3: Financial Impact - Due to the alleged wrongful acts and omissions, Ibotta's stock price experienced a sharp decline, resulting in substantial losses for the plaintiff and other class members [4]

Core Viewpoint - Costco Wholesale continues to demonstrate strong performance in the retail sector, achieving significant revenue and earnings growth despite tariff challenges [1][3]. Financial Performance - Quarterly revenue increased by 8% to $63.21 billion, with adjusted earnings per share (EPS) rising 13% to $4.28, surpassing analyst expectations [5]. - Same-store sales rose 8% when adjusted for gasoline prices and foreign currency, with U.S. same-store sales up 7.9% and Canadian comparable-store sales climbing 7.8% [6]. - E-commerce revenue grew by 15.7% on an adjusted basis, indicating strong online sales performance [6]. Customer Experience Initiatives - The company is investing in technology to enhance the checkout process and has extended gas-station hours [4]. - A "buy now, pay later" program for big-ticket items has been introduced, showing initial promise [4]. Membership Growth - Membership-fee revenue increased by 10.4% to $1.24 billion, benefiting from a fee hike implemented in September [8]. - Memberships rose by 6.8% to 79.6 million paid households, with higher-cost executive memberships increasing by 9% [8]. Market Position - Costco's same-store sales growth outperformed competitors, with Target reporting a decline of 3.8% and Walmart achieving 4.5% growth [11]. - The company continues to gain market share as consumers are attracted to the value offered by warehouse stores [11]. Expansion Plans - Costco opened eight new locations in the quarter, bringing the total to 905 warehouse stores, with plans to open nine more in the upcoming quarter [10]. - Approximately 80% of new openings will be in high-traffic markets, which may cannibalize some existing store sales but will help alleviate congestion [10]. Valuation Insights - The stock trades at a forward price-to-earnings (P/E) ratio of 57.5, reflecting a premium valuation that has expanded significantly in recent years [12]. - Despite concerns over high valuation relative to revenue growth, the stock's momentum remains strong [15].

Core Insights - The article discusses the investment positions of Parkev Tatevosian, CFA, and mentions that The Motley Fool has positions in and recommends Walmart [1] Company Insights - The Motley Fool has a disclosure policy regarding its investment positions [1] - Parkev Tatevosian is affiliated with The Motley Fool and may receive compensation for promoting its services [1]

Core Insights - The article discusses the investment positions of Parkev Tatevosian, CFA, and mentions that The Motley Fool has positions in and recommends Walmart [1] Company Insights - Parkev Tatevosian has no position in any of the stocks mentioned [1] - The Motley Fool has a disclosure policy regarding its investment positions [1] - The Motley Fool may compensate affiliates like Parkev Tatevosian for promoting its services [1]