• Sales Growth: 5.2% for the quarter; 5.6% for the full year in constant currency.
• Adjusted Operating Income: Increased 9.4% for the quarter; nearly 10% for the full year in constant currency.
• Adjusted EPS: Up 13% for the full year.
• Inventory Levels: Up 2.8% at the end of the fiscal year.
• Global E-commerce Growth: 16% for the quarter; penetration now 18% of sales.
• Walmart US Comp Sales: Increased 4.6%, with e-commerce sales growth of 20%.
• Sam's Club US Comp Sales: Increased 6.8%, with e-commerce growth of 24%.
• Gross Margin Expansion: 53 basis points for the quarter.
• Global Advertising Revenue: Grew 27% to about $4.4 billion for the year.
• Global Membership Income: Grew 21% to about $3.8 billion for the year.
• Return on Investment: Improved approximately 50 basis points to 15.5%.
• CapEx: Totaled $23.8 billion for the year.
• Dividend Increase: Raised by 13%, the largest increase in over a decade.

• Warning! GuruFocus has detected 6 Warning Sign with WMT.

Release Date: February 20, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Walmart Inc (NYSE:WMT) reported a strong quarter with sales growth of 5.2% and adjusted operating income up 9.4% in constant currency.
• The company continues to gain market share across countries and income levels, with transaction counts and unit volumes up across markets.
• Walmart Inc (NYSE:WMT) is growing profit faster than sales, with higher margin businesses like membership, marketplace, and advertising contributing significantly.
• The company is making significant progress in e-commerce, with a 16% growth in the fourth quarter and improved e-commerce economics, particularly in Walmart US.
• Walmart Inc (NYSE:WMT) is leveraging technology and AI to improve operations, with initiatives like the AI agent Wally and new coding tools saving millions of developer hours.

Negative Points

• Currency headwinds reduced reported sales by over $2 billion, impacting growth by 120 basis points.
• The company faces ongoing margin pressure from merchandise category mix, with a shift towards grocery and health and wellness.
• SG&A expenses deleveraged 46 basis points in the quarter, driven by tech investments, increased variable pay, and higher marketing and utilities costs.
• The acquisition of VIZIO is expected to have a 150 basis point negative impact on operating income growth due to integration investments and transition costs.
• Walmart Inc (NYSE:WMT) anticipates continued uncertainties related to consumer behavior and global economic and geopolitical conditions, which could impact future performance.

Q & A Highlights

Q: Is Walmart entering a phase with more economic sensitivity, and how is this factored into the sales and EPS guidance for 2026? A: Doug McMillon, CEO, stated that Walmart continues to focus on value and convenience, which are appealing to customers. John Rainey, CFO, added that the company is performing well, with January being the strongest month for US comps. The guidance reflects a consistent approach, with an outlook of 5% to 7% growth, excluding leap year and VIZIO transaction impacts, indicating confidence in navigating the macro environment.

Q: How should we think about the mix impact on gross margin in the upcoming fiscal year, especially as general merchandise growth improves? A: John Furner, CEO of Walmart US, noted that general merchandise sales have improved, with better unit flow and inventory management. John Rainey, CFO, mentioned that the mix change for general merchandise was down about 100 basis points last year, and they expect it to be about half of that this year. The marketplace is contributing positively, with categories like automotive and toys growing over 20%.

Q: Why not invest faster given the rising incremental margins in e-commerce? A: John Rainey, CFO, explained that Walmart is balancing investment and margin expansion. Investments in technology and supply chain automation are driving improvements. The company aims to build a great company for the long term, ensuring sustainable returns while continuing to invest in key areas.

Q: What are the assumptions for like-for-like inflation in grocery and general merchandise for the next year? A: John Furner, CEO of Walmart US, stated that they plan for a normalized inflation rate of 1% to 2%, with no large inflation number planned for the year. They are prepared for anomalies like the current situation with eggs due to avian flu, which tend to resolve over time.

Q: Can you discuss the details around the VIZIO acquisition and its impact on Walmart Connect? A: John Rainey, CFO, mentioned that the VIZIO acquisition will have a 70 basis point dilution in Q1 but is expected to be accretive next year. John Furner, CEO of Walmart US, expressed excitement about integrating VIZIO's operating system to enhance Walmart Connect's advertising capabilities, providing more efficient ways to distribute advertising for sellers and suppliers.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.