Walmart Inc. · NASDAQ:WMT
Walmart — Q2 2025 Earnings Presentation
36 slides from Walmart's earnings presentation, Aug 15, 2024
Slide 1: Financial presentation to accompany management commentary FY25 Q2
Financial presentation to accompany management commentary FY25 Q2
Slide 2: Guidance
Third Quarter Guidance The Company’s fiscal third quarter guidance is based 1 on the following FY24 Q3 figures: Net Sales: $159.4 billion, operating income: $6.2 billion, and adjusted EPS : $0.51. Guidance contemplates the impact of timing of festive events in the Company’s international segment and
Slide 3: Total revenues
Total revenues 1 Total revenues (cc) $169.7 billion, up +5.0% Amounts in billions, except as noted. Dollar changes may not recalculate due to rounding. $173.4 $169.3 • Total revenues reached $169.3 billion with strength across all $161.6 $160.8 $161.5 operating segments • Negative impact of $0.3 bil
Slide 4: Gross profit rate
Gross profit rate Gross profit rate +43bps to 24.4% 24.4% • Led by improvements in 24.1% Walmart U.S. and International 24.0% 24.0% • Reflects improvement from continuing to manage US pricing aligned to competitive price 23.3% gaps, as well as better eCommerce margins and favorable business mix in b
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 , +41bps 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 35bps driven by
Slide 6: Operating income
Operating income 1 Adjusted operating income of $7.9 billion, up 7.2% Amounts in billions, except as noted. Dollar changes may not recalculate due to rounding. 1 Operating income Adjusted operating income 1 $7.9 $7.9 • Adjusted operating income (cc) up $7.3 $7.4 7.4% relative to 4.9% growth in net $
Slide 7: EPS
EPS 2 Adjusted EPS of $0.67, up 9.8% 1 1,2 EPS Adjusted EPS $0.97 2 • Adjusted EPS of $0.67 excludes $0.68 $0.67 the effects, net of tax, of $0.11 $0.63 $0.61 from net losses on equity and $0.60 $0.60 $0.56 $0.51 other investments $0.06 Q2 FY24 Q3 FY24 Q4 FY24 Q1 FY25 Q2 FY25 Q2 FY24 Q3 FY24 Q4 FY24
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 $1.8 billion primarily due to timing of $15.1 certain payments and increased inventory purchases, partially offset by an incr
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 $1.0 billion representing 15.4 million shares, $1.1 $1.0 at an average price of $65.75 $0.5 $0.1 $1.5 per s
Slide 10: Returns
Returns 1 Return on assets (ROA) Return on investment (ROI) 1 15.1% • 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% 6.4% 14.1% in the comp
Slide 11: Walmart U.S. comp sales
1 Walmart U.S. comp sales Net sales +4.1%, eCommerce +22% • Value/convenience offering resonating with customers as comp sales +4.2% driven 6.4% by growth in transactions and unit volumes across both stores and digital channels ◦ Transactions ex fuel: +3.6% 4.9% ◦ Average ticket ex fuel: +0.6% 4.2%
Slide 12: Walmart U.S.
Gross profit rate +51bps Walmart U.S. • Improvement from continuing to manage pricing to maintain strong competitive price gaps to retail market • Advertising and data analytics & insights businesses aided business mix • Net delivery cost per order decreased nearly 40%; benefited eCommerce margins R
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, units and share gains • Grocery inflation ~60bps (moderated ~80bps versus Q1) + mid single-digit • Fresh food had strong sales and unit growth led by produce Grocery and meat
Slide 14: Walmart International net sales
Walmart International net sales1 Net sales (cc) $29.9 billion, +8.3% Amounts in billions, except as noted. Dollar changes may not recalculate due to rounding. 1 $32.4 • Sales growth (cc) led by Walmex, China and Flipkart $29.8 $29.6 • eCommerce sales grew 18% led by $27.6 $28.0 store-fulfilled picku
Slide 15: Walmart International
Walmart Gross profit rate +44bps International • Primarily due to improved eCommerce margins and growth in higher-margin businesses • Partially offset by ongoing channel and format mix changes Strong local businesses Operating expenses as a percentage of net sales powered by Walmart +11bps • Delever
Slide 16: Walmex
1,2 Walmex Net sales (cc): $12.8 billion, +6.4% Sales • Continued strength in food and consumables as well as solid growth in general merchandise 9.2% 8.7% • Sales growth negatively affected by 8.0% Easter timing which moved from Q2 last year to Q1 this year 6.3% • Opened 165 new stores in the past
Slide 17: Canada
1 Canada Net sales (cc): $6.0 billion, +3.5% Sales • Strong eCommerce growth led by store 5.0% fulfilled pickup and delivery 4.8% • Continued strength in food and 3.8% 3.4% consumables with softness in general merchandise • Increased private brand penetration in 1.5% food Comparable sales growth Gro
Slide 18: China
1 China Net sales (cc): $4.6 billion, +17.7% Sales • Continued strength in Sam’s Club and 18.6% eCommerce 17.2% • Positive traffic in both Sam's and Hyper formats 13.8% 12.5% • eCommerce penetration at 49%, up over 200bps vs Q2 last year 6.6% Gross profit rate Increase Comparable • Primarily due to
Slide 19: Sam's Club U.S. comp sales
1 Sam’s Club U.S. comp sales Net sales with fuel +4.7%, Net sales without fuel +5.5%, eCommerce +22% Sam's Club U.S. comp sales • Strong comp sales driven by increases in 5.5% 5.2% transactions and unit volume 4.4% 4.6% 3.8% ◦ Transactions ex fuel: +6.1% 3.3% 3.5% 3.1% ◦ Average ticket ex fuel: -0.8
Slide 20: Sam's Club U.S.
Sam's Club U.S. Gross profit rate +22bps, without fuel -11bps • Without fuel, gross profit impacted by category mix shifts • Continued focus on making strategic price investments and increasing value for members • Reflects impact of lapping LIFO expense Operating expenses as a percentage of net sale
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, cooler, and deli performed Fresh / Freezer / Cooler + high single-digit well Grocery and Beverage + low single-digit • Dry grocery, snacks, and drinks showed strength • Paper goods, laundry & home care,
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") and return on investment (“ROI”) as metrics to assess our return on capital. ROA is the most directly comparable measure based on our financial statements presented in accordance with GAAP, while ROI is considered a non-GAAP financial measu
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 Jul 31, Oct 31, Jan 31, Apr 30, Jul 31, (Dollars in millions) 2023 2023 2024 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 Jul 31, Oct 31, Jan 31, Apr 30, Jul 31, (Dollars in millions) 2023 2023 2024 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 $16.4 billion for the six months ended July 31, 2024, which represents a d
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) Q2 FY24 Q3 FY24 Q4 FY24 Q1 FY25 Q2 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 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 34: Non-GAAP measures – adjusted EPS (cont.)
Non-GAAP measures – adjusted EPS (cont.) 3 3 Percent Three Months Ended April 30, 2024 Three Months Ended April 30, 2023 Change Diluted earnings per share: Reported EPS $0.63 $0.21 +200.0% Pre-Tax Tax 1 NCI Net Pre-Tax Tax 1 NCI Net Adjustments: Impact Impact Impact2 Impact Impact Impact Impact2 Imp
Slide 35: Non-GAAP measures – adjusted EPS (cont.)
Non-GAAP measures – adjusted EPS (cont.) 3 3 Percent Three Months Ended Oct 31, 2023 Three Months Ended Oct 31, 2022 Change Diluted earnings per share: Reported EPS $0.06 $(0.22) NM Pre-Tax Tax 1 NCI Net Pre-Tax Tax 1 NCI Net Adjustments: Impact Impact Impact2 Impact Impact Impact Impact2 Impact Unr
Slide 36: 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