Walmart Great FY 2025 Earnings: Maytag Repairman Envious of Consistent Performance - Trump Guidance Included
Almost all Walmart's gains are being driven from higher-income consumers. These are traditional Amazon-oriented convenience consumers. I tried to separate out the data by section.
Almost all gains due to high-income consumers. Adding convenience, improving cost structure, growing higher-margin businesses.
Guidance: consistent with prior years. Each of the last two years saw operating income grow 4-6%. This year, Walmart projects 5-7% operating income growth (excluding the leap year and Vizio acquisition). Q1 will see slower operating income growth than sales, but it should balance out for the year.
FY 2026 consolidated sales growth is expected at 3-4%, lapping the leap year. Operating income is projected to grow faster at 3.5-5.5%.
General merchandise showed low single-digit comparable sales growth (hardlines, toys, home, fashion).
Grocery remained a standout with mid-single-digit growth.
Operating Income Growth
New businesses (ads, membership, Walmart Fulfillment Services) are providing 50% of operating income growth.
Membership income grew 21% to $3.8 billion.
E-commerce and Advertising Growth
Global e-commerce penetration now stands at 18% of sales, up 1,100 basis points compared to FY20.
Global ads revenue grew 27% to $4.4 billion.
Walmart US Connect (ads) grew by 24%.
E-commerce losses improved by 80% over the last year, as "densification" continues to play a key role.
Walmart’s e-commerce sales increased 20% in Q4.
Supply Chain Efficiency
1-3 hour orders from stores increased by 80% year-over-year.
Same-day store unit fulfillment grew by 100%, reaching 5 billion units, now making up 30% of store orders.
Walmart Fulfillment Services (WFS) penetration reached record highs of 50%, up 600 basis points year-over-year.
Net US delivery cost per order was reduced by 20%.
Store-fulfilled delivery now reaches 93% of households for same-day service.
Marketplace Expansion
Walmart US Marketplace grew 37%, with 45% of orders fulfilled by WFS.
Home, auto, and seasonal categories saw growth over 30%.
Auto, toys, and patio categories each grew over 20%.
International Growth
Canada’s e-commerce performance increased 30% in Q4.
Positive trends were observed in Mexico and Canada, with WFS growth of 20%. Sales of items using WFS grew over 85%.
The Trump Effect: A Non-Factor
No impact to guidance on tariffs.
No impact expected due to immigration.
Consistent, resilient consumer behavior remains.
Walmart maintains a cautious outlook due to uncertainty.
Final Thoughts
Strong to quite strong earnings? Don't over-index your business on tariffs and immigration impacts, so sayeth Walmart.
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