Walmart Inc. · NASDAQ:WMT
Walmart — Q1 2025 Earnings Presentation
37 slides from Walmart's earnings presentation, May 16, 2024
Slide 1: Financial presentation to accompany management commentary FY25 Q1
Financial presentation to accompany management commentary FY25 Q1
Slide 2: Guidance
Guidance Metric Q2 Consolidated net sales (cc) Increase 3.5% to 4.5% Consolidated operating income (cc) Increase 3.0% to 4.5% The following guidance reflects the Company’s Adjusted EPS $0.62 to $0.65 expectations for the second quarter and fiscal year 2025 and is provided on a non-GAAP basis as the
Slide 3: Total revenues
Total revenues 1 Total revenues (cc) $161.1 billion, up +5.8% Amounts in billions, except as noted. Dollar changes may not recalculate due to rounding. $173.4 • Total revenues reached $161.5 billion with strength across all operating $161.6 $160.8 $161.5 segments $152.3 • Net sales positively affect
Slide 4: Gross profit rate
Gross profit rate Gross profit rate +42bps to 24.1% 24.1% 24.0% 24.0% • Due to improvements across segments, led by Walmart U.S. 23.7% • Improvement from continuing to manage pricing aligned to 23.3% competitive price gaps, lower markdowns as a result of disciplined inventory management, and favorab
Slide 5: Operating expenses as a percentage of net sales
Operating expenses as a percentage of net sales 1 Adjusted operating expenses as a percentage of net sales , +24bps to 20.6% Operating expenses as a percentage Adjusted operating expenses as a 1 of net sales percentage of net sales • Operating expenses deleveraged on a reported basis 40bps driven by
Slide 6: Operating income
Operating income 1 Adjusted operating income of $7.1 billion, up 13.7% Amounts in billions, except as noted. Dollar changes may not recalculate due to rounding. 1 Operating income Adjusted operating income 1 • Adjusted operating income (cc) up $7.3 $7.3 $7.4 $7.3 12.9% relative to 5.7% growth in net
Slide 7: EPS
EPS 2 Adjusted EPS of $0.60, up 22.4% 1 1,2 EPS Adjusted EPS $0.97 2 • Adjusted EPS of $0.60 excludes $0.68 the effects, net of tax, of $0.05 $0.63 $0.61 from net gains on equity and $0.60 $0.60 $0.49 $0.51 other investments and $0.02 of business reorganization charges $0.21 $0.06 Q1 FY24 Q2 FY24 Q3
Slide 8: Cash flow
Cash flow Amounts in billions, except as noted. Dollar changes may not recalculate due to rounding. 1 Operating cash flow Free cash flow $35.7 • Operating cash flow decreased $0.4 billion primarily due to $15.1 changes in working capital assets and liabilities, including timing impacts, partially of
Slide 9: Returns to shareholders
Returns to shareholders Dividends and share repurchases Amounts in billions, except as noted. Dollar amounts may not recalculate due to rounding. • Share repurchases during the quarter totaled $1.1 billion representing 18.0 million shares, at an average price of $59.05 per $0.7 share $0.5 $1.1 $0.1
Slide 10: Returns
Returns 1 Return on assets (ROA) Return on investment (ROI) 1 • ROI increased primarily as a result of 7.9% 15.0% 15.0% an increase in operating income, primarily due to lapping opioid legal charges and business reorganization 6.6% and restructuring charges recorded 6.5% 14.1% in the comparative tra
Slide 11: Walmart U.S. comp sales
1 Walmart U.S. comp sales Net sales +4.6%, eCommerce +22% • Comp sales +3.8% driven by growth in 7.4% transactions and unit volumes; strong value/convenience proposition resonating 6.4% with customers ◦ Transactions ex fuel: +3.8% 4.9% ◦ Average ticket ex fuel: flat 4.0% 3.8% • Continued share gains
Slide 12: Walmart U.S.
Gross profit rate +46 bps Walmart U.S. • Managed pricing to maintain strong competitive price gaps to retail market • Benefited from lower markdowns as a result of disciplined inventory management • Advertising and data analytics & insights businesses aided business mix • Offset by category mix pres
Slide 13: Walmart U.S. merchandise category performance details
Walmart U.S. Merchandise category performance details Category Comp Comments • Strong comps driven by increased transactions and units • Grocery inflation +LSD in Q1 (moderated ~80 bps versus Q4) • Fresh food had strong unit growth led by produce and meats Grocery + mid single-digit with elevated qu
Slide 14: Walmart International net sales
Walmart International net sales1 Net sales (cc) $29.4 billion, +10.7% Amounts in billions, except as noted. Dollar changes may not recalculate due to rounding. 1 • Sales growth (cc) led by Walmex, China, and Flipkart $32.4 • Continued strength in food and $29.8 consumables as well as improved growth
Slide 15: Walmart International
Walmart Gross profit rate +32 bps International • Primarily due to improved eCommerce margins and growth in higher-margin services • Partially offset by ongoing channel and format mix changes and investments in price gaps Strong local businesses Operating expenses as a percentage of net sales powere
Slide 16: Walmex
1,2 Walmex Net sales (cc): $12.1 billion, +10.8% Sales • Strong performance across categories, including general merchandise • In Mexico, comp sales grew 9.5%, driven 9.3% 9.2% by Bodega and Sam's Club 8.7% 8.0% • Mexico growth helped by accelerated payments from government social 6.3% programs, Eas
Slide 17: Canada
1 Canada Net sales (cc): $5.3 billion, +3.9% Sales • Continued strength in food and consumables 6.3% • Strong eCommerce growth led by 5.0% store-fulfilled pickup and delivery and 4.8% marketplace 3.8% • Celebrated 30th Anniversary alongside multiple festive events Comparable 1.5% Gross profit rate R
Slide 18: China
1 China Net sales (cc): $5.7 billion, +16.2% Sales • Continued strength in Sam’s Club and eCommerce 25.5% • Growth positively affected by a later Chinese New Year shopping season 18.6% • eCommerce penetration at 43%, up over 17.2% 200 bps vs Q1 last year 12.5% • Lapping strong post-covid reopening l
Slide 19: Sam's Club U.S. comp sales
1 Sam’s Club U.S. comp sales Net sales with fuel +4.6%, Net sales without fuel +5.3%, eCommerce +18% Sam's Club U.S. comp sales 7.0% • Solid comp sales driven by increases in transactions and unit volume 5.5% ◦ Transactions ex fuel: +5.4% 4.2% 4.4% 3.8% 3.5% ◦ Average ticket ex fuel: -1.0% 3.3% 3.1%
Slide 20: Sam's Club U.S.
Sam's Club U.S. Gross profit rate +58 bps, without fuel +64 bps • Reflects impact of lapping LIFO • Benefited from lower markdowns as a result of disciplined inventory management • Continued focus on cost and price to increase value for the member Operating expenses as a percentage of net sales +17
Slide 21: Sam's Club U.S. category comparable sales
Sam’s Club U.S. Category comparable sales Category Comp Comments • Fresh meat, produce & floral, prepared foods, and deli Fresh / Freezer / Cooler + high single-digit performed well Grocery and Beverage + mid single-digit • Dry grocery, snacks, drinks, and candy showed strength • Paper goods, laundr
Slide 22: Supplemental Information - FY25 and FY26 Comparable Sales 4-5-4 Reporting Calendars
Supplemental Information - FY25 and FY26 Comparable Sales 4-5-4 Reporting Calendars We report U.S. comparable sales on a 13-week and 52-week retail calendar — commonly referred to as a "4-5-4" calendar — which uses 364 days in a year. In certain years, it becomes necessary to add a 53rd week to our
Slide 23: Safe harbor and non-GAAP measures
Safe harbor and non-GAAP measures This presentation and related management commentary contains statements that may be "forward-looking statements" as defined in, and are intended to enjoy the protection of the safe harbor for forward- looking statements within the meaning of Section 21E of the Secur
Slide 24: Non-GAAP measures – ROI
Non-GAAP measures – ROI We include return on assets ("ROA"), which is calculated in accordance with U.S. generally accepted accounting principles ("GAAP") as well as return on investment ("ROI") as measures to assess returns on assets. Management believes ROI is a meaningful measure to share with in
Slide 25: Non-GAAP measures – ROI (cont.)
Non-GAAP measures – ROI (cont.) The calculation of ROA and ROI, along with a reconciliation of ROI to the calculation of ROA, is as follows: CALCULATION OF RETURN ON ASSETS Trailing Twelve Months Ending Apr 30, Jul 31, Oct 31, Jan 31, Apr 30, (Dollars in millions) 2023 2023 2023 2024 2024 Numerator
Slide 26: Non-GAAP measures – ROI (cont.)
Non-GAAP measures – ROI (cont.) The calculation of ROA and ROI, along with a reconciliation of ROI to the calculation of ROA, is as follows: CALCULATION OF RETURN ON INVESTMENT Trailing Twelve Months Ending Apr 30, Jul 31, Oct 31, Jan 31, Apr 30, (Dollars in millions) 2023 2023 2023 2024 2024 Numera
Slide 27: Non-GAAP measures – free cash flow
Non-GAAP measures – free cash flow We define free cash flow as net cash provided by operating activities in a period minus payments for property and equipment made in that period. Net cash provided by operating activities was $4.2 billion for the three months ended April 30, 2024, which represents a
Slide 28: Non-GAAP measures – free cash flow (cont.)
Non-GAAP measures – free cash flow (cont.) The following table sets forth a reconciliation of free cash flow, a non-GAAP financial measure, to net cash provided by operating activities, which we believe to be the GAAP financial measure most directly comparable to free cash flow, as well as informati
Slide 29: Non-GAAP measures – constant currency
Non-GAAP measures – constant currency In discussing our operating results, the term currency exchange rates refers to the currency exchange rates we use to convert the operating results for countries where the functional currency is not the U.S. dollar into U.S. dollars. We calculate the effect of c
Slide 30: Non-GAAP measures – constant currency (cont.)
Non-GAAP measures – constant currency (cont.) The table below reflects the calculation of constant currency for total revenues, net sales and operating income for the trailing five quarters. Three Months Ended Consolidated (Dollars in millions) Q1 FY24 Q2 FY24 Q3 FY24 Q4 FY24 Q1 FY25 Total revenues:
Slide 31: Non-GAAP measures – adjusted operating expenses as a percentage of net sales
Non-GAAP measures – adjusted operating expenses as a percentage of net sales Adjusted operating expenses as a percentage of net sales is considered a non-GAAP financial measure under the SEC’s rules because it excludes certain charges included in operating, selling, general and administrative expens
Slide 32: Non-GAAP measures – adjusted operating income
Non-GAAP measures – adjusted operating income Adjusted operating income is considered a non-GAAP financial measure under the SEC’s rules because it excludes certain charges included in operating income calculated in accordance with GAAP. Management believes that adjusted operating income is a meanin
Slide 33: Non-GAAP measures – adjusted operating income (cont.)
Non-GAAP measures – adjusted operating income (cont.) The table below reflects the calculation of adjusted operating income for the three months ended April 30, 2024 and April 30, 2023 for the Walmart U.S. segment. Three Months Ended Walmart U.S. (Dollars in millions) Q1 FY25 Q1 FY24 Operating incom
Slide 34: Non-GAAP measures – adjusted EPS
Non-GAAP measures – adjusted EPS Adjusted diluted earnings per share attributable to Walmart (Adjusted EPS) is considered a non-GAAP financial measure under the SEC’s rules because it excludes certain amounts included in the diluted earnings per share attributable to Walmart calculated in accordance
Slide 35: Non-GAAP measures – adjusted EPS (cont.)
Non-GAAP measures – adjusted EPS (cont.) 3 3 Percent Three Months Ended Jan 31, 2024 Three Months Ended Jan 31, 2023 Change Diluted earnings per share: Reported EPS $0.68 $0.77 -11.7% Pre-Tax Tax 1 NCI Net Pre-Tax Tax 1 NCI Net Adjustments: Impact Impact Impact2 Impact Impact Impact Impact2 Impact U
Slide 36: Non-GAAP measures – adjusted EPS (cont.)
Non-GAAP measures – adjusted EPS (cont.) 3 3 Percent Three Months Ended Jul 31, 2023 Three Months Ended Jul 31, 2022 Change Diluted earnings per share: Reported EPS $0.97 $0.63 +54.0% Pre-Tax Tax 1 NCI Net Pre-Tax Tax 1 NCI Net Adjustments: Impact Impact Impact2 Impact Impact Impact Impact2 Impact U
Slide 37: Adjusted EBITDA and adjusted EBITDA margin
Non-GAAP measures – adjusted EBITDA and adjusted EBITDA margin The calculation of net income (loss) margin and adjusted EBITDA margin, along with a reconciliation of adjusted EBITDA margin to the calculation of net income (loss) margin, is as follows: We include net income and net income margin, whi