Walmart Surges on 5.5% Revenue Jump, $4.6 Billion Profit in Q3 F2025
Walmart Inc. (NYSE: WMT) reported its third-quarter performance this morning, with revenue and earnings surpassing expectations and the company raising its full-year guidance. For the fiscal quarter ending October 31, 2024, the retail giant reported consolidated revenue of $169.6 billion, a 5.5% increase from $160.8 billion in the same quarter last year.
This marks the 19th consecutive quarter of top-line growth. Sequentially, revenue rose 1.2% from the $167.6 billion posted in Q2 2024, reflecting steady consumer engagement despite ongoing macroeconomic pressures.
E-commerce once again proved a growth engine, with sales surging 27% globally, a notable acceleration from the 24% growth reported last quarter. Walmart U.S. remained the anchor of the company’s success, with comparable-store sales increasing 5.3% year-over-year, outpacing both last quarter’s 5% growth and the 3.8% growth analysts had forecast. This performance was primarily driven by a 3.1% rise in transaction volumes and a 2.1% increase in average ticket size. Sequentially, however, the pace of transaction growth slowed slightly from the 3.4% increase seen in Q2, reflecting caution among lower-income shoppers even as Walmart continues to gain share among upper-income households.
Sam’s Club delivered comparable-store sales growth of 7%, a strong result compared to last year’s 3.8% increase. However, operating income in this segment remained flat year-over-year at $600 million, as investments in associate wages offset gains from higher membership income and improved margins. This raises questions about the sustainability of Sam’s Club’s profitability, especially given the competitive pressures in the warehouse club segment.
Gross margins improved by 21 basis points year-over-year, led by Walmart U.S., which benefited from a favorable product mix and higher membership income. This is a slight improvement from last quarter’s 19 basis point gain, but it still lags behind pre-pandemic levels.
International operations were another bright spot, with net sales climbing 8% year-over-year to $30.3 billion. Adjusting for currency fluctuations, international revenue increased 12.4%, driven by strong performance in markets like Mexico and India. Notably, Flipkart’s Big Billion Days sale boosted results, but this event’s impact will likely taper off in Q4, leaving less room for similar growth.
Operating income grew 8.2% year-over-year to $6.71 billion, surpassing revenue growth and signaling improved profitability. This outpaced the 6.3% increase in operating expenses, highlighting Walmart’s ability to leverage its scale effectively. Compared to the prior quarter’s $6.88 billion in operating income, the slight decline suggests that the company’s aggressive pricing strategies, while driving revenue, continue to compress margins in some areas.
Net income for the quarter surged to $4.58 billion, or $0.57 per share, an increase from $453 million, or $0.06 per share, a year ago. Adjusted earnings per share of $0.58 easily exceeded the FactSet consensus of $0.53. Sequentially, however, net income was slightly down from Q2 2024’s $4.77 billion.
Walmart’s balance sheet remains solid, a result of operating cash flow reaching $22.9 billion year-to-date, a 20.5% increase from $19 billion last year. Free cash flow also improved, rising to $6.2 billion, up from $4.3 billion year-to-date in 2023. Despite these strengths, Walmart’s total debt increased slightly to $47.3 billion, up from $45.9 billion in Q2, reflecting continued capital investments in technology, supply chain enhancements, and store upgrades.
The company raised its full-year fiscal 2025 guidance, now projecting net sales growth of 4.8% to 5.1%, up from the previous range of 3.75% to 4.75%. Adjusted earnings per share guidance was increased to $2.42 to $2.47, compared to the earlier forecast of $2.35 to $2.43. While these revisions reflect confidence in operational execution, the midpoints of both ranges suggest a slower growth trajectory compared to fiscal 2024.
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