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.
Overall:
* Almost all gains due to high income consumer. Adding convenience, improving cost structure, growing higher margin businesses.
* guidance: consistent w/ prior years. each of last 2 years. op income 4-6%. this year 5-7% op income guidance (ex-leap year and vizio). Q1 slower op income growth than sales, but will balance out for the year.
* FY 2026 consolidated sales growth 3-4%, w/ lapping leap year. op income grow faster at 3.5 - 5.5%.
* gen merch: low single digit comp sales growth (hardlines, toys, home, fashion)
* grocery standout: mid single digit growth.
Operating Income:
* new businesses (ads, membership, WFS) providing 50% of op income growth
* membership income grew 21% to 3.8B
Ecom + Ads:
* global ecom penetration is now 18% of sales = 1100 bps higher than FY20
* global ads grew 27% to 4.4B
* 24% WMT US Connect (ads) growth
* 80% improvement in ecom losses in last year ("densification" continues its tour of the lexicon)
* wmt ecom sales up 20% in 4Q
Supply Chain:
* 1-3 hour orders from stores up 80% y/y
* same day store units up 100% to 5B units (now up to 30% of store orders)
* WFS penetration record highs of 50%, up 600bps y/y
* 20% reduction in net US delivery cost per order
* store fulfilled delivery catchment = 93% of households can be reached same day
Marketplace:
* wmt us mkpl grew 37% with 45% of orders fulfilled by WFS
* home, auto, seasonal all up 30+%+
* auto, toys, patio all growing 20%+.
Intl:
* canada ecom performance up 30% in 4Q
* good trends in MX/CA. WFS increased 20%. sales of items w/ WFS grew over 85%
and the section you have been waiting for..
The Trump Effect = Non-Factor:
* No impact to guidance on tariffs.
* No impact expected due to immigration.
* Consistent, resilient consumer
* Still cautious outlook due to uncertainty
Strong to quite strong earnings? Don't over-index your business on tariffs and immigration impacts, so sayeth Walmart.
