Retail giant Walmart (WMT 0.35%) reported fiscal 2025 third-quarter results on Tuesday, Nov. 19, showing strong growth in revenue, operating income, and e-commerce. The company's adjusted earnings per share reached $0.58, surpassing the analyst consensus estimate of $0.53. Revenue for the quarter also topped estimates and reached $169.6 billion, driven by its successful omnichannel strategy. Operating income increased by 8.2% to $6.7 billion, supported by efficient cost management and improved gross margins.
Overall, the quarter reflected Walmart's continued success in executing its strategic imperatives, though challenges like competitive pressures and geopolitical uncertainties remain.
| Metric | Q3 FY2025 | Analyst Estimate | Q3 FY2024 | Change (YOY) |
|---|---|---|---|---|
| Revenue | $169.6 billion | $167.7 billion | $160.8 billion | 5.5% |
| Adjusted EPS | $0.58 | $0.53 | $0.51 | 13.7% |
| Operating income | $6.7 billion | N/A | $6.2 billion | 8.2% |
| Walmart U.S. sales | $114.9 billion | N/A | $109.4 billion | 5% |
Source: Walmart. Note: Analyst consensus estimates for the quarter provided by FactSet. YOY = Year over year.
A Snapshot of Walmart's Business Model and Strategies
Walmart is a retail powerhouse, boasting a network of over 10,500 stores worldwide that cater to customers in 19 countries. Known for its customer-centric model, the company prioritizes offering competitive pricing and focuses on integrating physical and digital shopping experiences through its omnichannel strategy. This approach has strengthened its presence, allowing Walmart to effectively compete against digital-first companies.
In recent years, Walmart has focused on enhancing e-commerce capabilities, investing heavily in technology and innovation. Its omnichannel strategy integrates physical and e-commerce platforms seamlessly, with services like pickup, delivery, and Walmart+ membership gaining traction. Effective cost management and a diverse product portfolio also play key roles in bolstering Walmart's competitiveness and market presence.
Quarter Highlights and Performance Review
The third quarter was marked by standout achievements in both financial and operational metrics for Walmart. Total revenue jumped 5.5% year over year, attributed to strong sales in both the U.S. and international markets. Notably, Walmart's international sales surged by 12.4% on a constant currency basis, fueled by dynamic performance in markets like Walmex and Flipkart.
The U.S. segment's e-commerce sales reported a 22% growth, driven by increased customer engagement and expanded delivery and pickup services. This aligns with Walmart's broader global e-commerce growth of 27%. Efforts in price leadership also paid off, evidenced by a 21-basis-point rise in gross margins due to the success of its "Everyday Low Prices" strategy.
Product categories like groceries, health, and financial services all exhibited strength. Sam's Club contributed to growth with a notable 15% increase in membership income. Concurrently, Walmart's investment in technology continued to pay dividends, with its ad business, Walmart Connect, reporting 26% growth, underscoring enhanced digital capabilities.
Looking Ahead: Walmart's Financial Outlook
Walmart's management raised its full-year guidance outlook for multiple metrics based on third-quarter achievements. The company now anticipates net sales growth of 4.8% to 5.1% and adjusted operating income growth ranging from 8.5% to 9.25% for fiscal year 2025. These projections reflect sustained e-commerce expansion, coupled with effective price management and cost control efforts.
As the company looks to future quarters, it plans to fortify its omnichannel experiences through technological investments while maintaining price leadership. Special attention will be on expanding membership programs and leveraging global scale, especially in emerging markets, to build additional revenue streams. Observers should also monitor how Walmart navigates potential competitive threats and geopolitical uncertainties that could influence future performance.
