Earnings report sharing/ Did retail giant Walmart's full-year guidance meet expectations? Stock price rose?

$Walmart(WMT.US) reported its Q1 2025 earnings before the market opened on May 16, with both revenue and EPS exceeding expectations. Full-year revenue is expected to meet or slightly exceed previous forecasts, and the stock price rose more than 5% in pre-market trading. So, what other data should we pay attention to? Let’s take a look together!

Walmart is a global retail giant founded in 1962. It offers a wide range of products and services, including groceries, household items, electronics, and apparel. Known for its low prices and extensive product selection, Walmart operates supermarkets, department stores, and e-commerce platforms. With stores worldwide, it is one of the largest retailers globally and one of the biggest employers in the U.S.

Q1 2025

Revenue increased 5% year-over-year (YoY) to $161.5 billion, compared to $173.4 billion last quarter and $161.6 billion mid-year, surpassing market expectations of $159.5 billion.

By segment: Walmart U.S., Walmart International, and Sam’s Club. Walmart U.S. revenue grew 4.6% YoY to $108.7 billion (vs. $117.6 billion last quarter and $110.9 billion mid-year), with higher gross margins YoY. E-commerce sales surged 22% YoY (vs. 17% last quarter), driven by strong growth in home delivery, advertising, and in-store pickup.

Walmart International revenue rose 12.1% YoY (vs. 17.6% last quarter and 13.3% mid-year), fueled by growth in China, Mexico, and its Indian e-commerce arm Flipkart. E-commerce and advertising grew 19% and 27% YoY, respectively (vs. 44% and 76% last quarter, and 26% and 40% mid-year).

Sam’s Club revenue increased 4.6% YoY (vs. 2% last quarter and -0.3% mid-year). Comparable sales (ex-fuel) rose 4.4% YoY, beating expectations, with groceries, health & wellness products performing strongest, while electronics and office supplies remained weak. Membership and premium membership penetration hit new highs, driving membership fee growth from 10% to 13% YoY.

EPS jumped 22.4% YoY to $0.60, above the $0.52 consensus.

Walmart U.S. comparable sales (ex-fuel) grew 3.8% YoY (vs. 4% last quarter), exceeding the 3.5% forecast.

Gross margin improved to 24.1% from 23.3% last quarter, while operating margin held steady at 4.2%.

Inventory declined ~2.7% YoY, led by Walmart U.S. (-4.2%) and Sam’s Club (-4.9%), partially offset by a 3.7% increase in Walmart International.

Outlook

Next quarter: Net sales growth of 3.5-4.5% YoY, operating profit growth of 3-4.5% YoY, and EPS of $0.62-$0.65 (slightly below consensus of $0.64).

Full-year: Net sales growth of 3-4% YoY, operating profit growth of 4-6% YoY, and EPS of $2.37.

Summary

All segments posted revenue growth, notably Walmart International (+12.1% YoY) and membership/other income (+21% YoY). High-margin global e-commerce (+21% YoY) and advertising (+24% YoY) showed robust performance, with penetration rising across markets.

Inventory levels improved, supporting margins. Grocery comps grew 4-6% YoY, health & wellness 7-9%, while general merchandise (impacted by mild deflation) fell 1-3%.

Inflationary pressures eased, but food/grocery prices remain elevated, keeping consumers cautious (more trips, smaller baskets). Disposable income constraints persist, though electronics/non-essential sales showed slight recovery.

Economic headwinds for retailers are moderating, with deflation unlikely. Consumers increasingly use credit/buy-now-pay-later (BNPL) options—U.S. BNPL e-commerce spend hit $25.9B YTD April, posing potential repayment risks.

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