Walmart reports Q4, full year results

Walmart's low prices, a growing assortment and an e-commerce business driven by faster delivery times, contributed to the company's momentum and its strong fourth quarter results. So said Doug McMillon, president and CEO in delivering the retailer's fourth-quarter and full year results.  

“We’re gaining market share, our top line is healthy, and we’re in great shape with inventory. We’ll stay focused on growth, improving operating margins, and strengthening ROI as we invest to serve our customers and members even better,” McMillon said.

Walmart Fourth Quarter Highlights: 

• Revenue of $180.6 billion, up 4.1%, or 5.3% (cc)
• Gross margin rate up 53 bps, led by Walmart U.S.
• Operating income up $0.6 billion, or 8.3%, adjusted up 9.4% (cc) due to higher gross margins and growth in membership income; also benefited from improved economics in e-commerce
• Global e-commerce sales grew 16%, led by store fulfilled pickup & delivery and U.S. marketplace; growth negatively affected by timing of Flipkart’s Big Billion Days sales event  
• Global advertising business grew 29%, including 24% for Walmart Connect in the U.S.
• Adjusted EPS of 66 cents, excludes the effect, net of tax, from a net loss of 2 cents on equity and other investments as well as 1 cents from the proceeds of an opioid-related legal settlement
• Completed acquisition of VIZIO

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Full Year Highlights: 

• Revenue of $681 billion, up 5.1%, or 5.6% (cc)
• Global advertising business grew 27% to reach $4.4 billion
• Operating income up $2.3 billion or 8.6%; adjusted up 9.7% (cc), growing faster than sales
• Company raises dividend 13% to $0.94 per share; largest increase in over a decade 

 Walmart U.S.: 

• Broad-based sales momentum across merchandise categories; strong seasonal sales despite compressed holiday shopping season; expedited delivery channels resonating with customers desiring speed of delivery
• Comp sales growth led by transaction counts and unit volumes; share gains primarily from upper-income households
• e-commerce sales up 20% reflects strength in store-fulfilled pickup & delivery, advertising and marketplace
• Walmart Connect advertising sales increased 24% aided by 50% growth in marketplace seller advertiser counts
• Gross profit rate increased 51 bps; membership income up double-digits; operating expense deleveraged 53 bps
• Operating income up 7.4% due in part to improved e-commerce economics, aided by improved business mix
• Inventory increased 3% on 5% sales growth while maintaining healthy in-stock levels

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Walmart International: 

• Growth in net sales (cc) led by China, Walmex and Canada; transaction counts & unit volumes up across markets
• Timing of Flipkart’s The Big Billion Days event affected growth in Q4 with corresponding benefit in Q3
• e-commerce sales grew 4% and advertising business grew 10%; both affected by the timing of Flipkart’s BBD
• Other than Flipkart, strong growth in eCommerce sales and increased penetration in all markets
• e-commerce sales grew 20% and advertising business grew 26% in 2H; both similar to growth in 1H
• Operating income (cc) growth driven by improved eCommerce economics and benefited from business mix changes
• Currency rate fluctuations negatively affected sales by $2 billion and operating income by $.2 billion

Sam’s Club U.S.: 

• Strong sales growth across club and digital channels, led by food and health & wellness categories
• Comp sales growth primarily driven by transaction counts and unit volumes
• e-commerce sales up 24%, led by club-fulfilled pickup and delivery
• Share gains in grocery and general merchandise categories, including apparel and consumer electronics
• Strong growth in membership income, up 13%
• Operating income was impacted by previously announced associate wage investments and higher incentive pay; includes ~730 bps headwind due to lapping LIFO benefit last year

Looking ahead, Walmart issued guidance for FY26 with net sales expected to grow 3% to 4% and adjusted operating income in constant currency to grow 3.5% to 5.5%, including a headwind of 150 basis points from the acquisition of VIZIO and lapping leap year.