Walmart Inc., Q3 2025 Earnings Call, Nov 19, 2024 - NYSE:WMT

NYSE:WMT

Stephanie Wissink introduced the call, welcoming participants and providing an overview of the format. She noted that Doug McMillon, CEO, and John David Rainey, CFO, would provide initial comments, followed by a Q&A session with segment CEOs John Furner, Kath McLay, and Chris Nicholas. She also directed attendees to the earnings release and presentation on the website for detailed results and highlights. Wissink emphasized the importance of limiting questions to one per participant to accommodate as many as possible. Additionally, she reminded listeners about forward-looking statements and the associated risks and uncertainties.

**- Sales grew 6.1% in constant currency, and profit was up 9.8%.

• E-commerce grew 27%, advertising grew 28%, and membership income was up 22%.

• Sales for Walmart International grew 12.4% in constant currency.

• Comp sales for Sam's Club U.S. were 7%, and Walmart U.S. delivered comp sales of 5.3%.

• Transaction counts and unit volumes were positive across each segment.

• The company is gaining market share in the U.S., particularly among households earning more than $100,000.

• Curbside pickup and delivery sales grew faster than in-store sales.

• The company faced challenges from a U.S. port strike, two large hurricanes, and flooding, but the team responded effectively.

• Walmart and the Walmart Foundation made a $16 million commitment to disaster relief efforts.

• The company is investing in technology, including generative AI, to improve the customer and member experience and enhance associate productivity.

• New initiatives, such as the Scan & Go and Just Go exit technology at Sam's Club, are improving convenience and member satisfaction.

• The company is expanding its presence in international markets, with notable growth in China and India.

• The business model is evolving, with more diversified and durable sources of profit, allowing for ongoing investments while delivering financial results.**

**- John David Rainey thanked the team for delivering another strong quarter, noting steady momentum across the business.

• Customers and members continue to respond positively to Walmart's value proposition, with lower prices and greater convenience.

• Walmart is broadening its assortment, improving the customer experience, and earning trust, leading to share gains.

• The company is realizing benefits from investments in its core omni-retail business and seeing improved profitability in newer businesses.

• Operating income grew faster than sales, aligning with the financial framework.

• Unanticipated expenses from hurricanes impacted the quarter, but the team responded effectively to support affected communities.

• Q3 sales, operating income, and EPS exceeded the top end of guided ranges, with all three operating segments outperforming expectations.

• Walmart U.S. comp sales increased 5.3%, including 22% e-commerce growth, with strong transaction and unit volume growth.

• Store-fulfilled delivery surpassed a $2.5 billion monthly run rate, with 12 consecutive months above $2 billion.

• Food categories showed the highest unit volume growth in four years, and health and wellness grew in the mid-teens due to branded pharmacy scripts.

• General merchandise showed low single-digit comp sales growth, with strength in home, hardlines, and toys.

• U.S. customers remain resilient, seeking value and convenience.

• International business had strong constant currency sales growth of 12.4%, with Flipkart and Walmex leading.

• E-commerce sales grew 43% internationally, with speed of delivery becoming increasingly important.

• Membership income grew significantly, with Sam's Club U.S. comp sales up 7% and e-commerce growth of 26%.

• Gross margin expanded 21 basis points, led by Walmart U.S., with international results pressured by Flipkart's BBD sales event.

• Walmart is continuing to lower prices, with price rollbacks on approximately 6,000 items.

• U.S. net delivery cost per order saw a 40% reduction for the third consecutive quarter.

• Advertising, membership, marketplace, and fulfillment services are reshaping profit composition.

• Full year guidance was raised, with sales growth expected at 4.8% to 5.1% and operating income growth at 8.5% to 9.25%.

• Fourth quarter guidance implies sales growth of 3% to 4% and operating income growth of 5% to 7.5%.

• The company is focused on balancing investments with improved returns for customers, associates, and shareholders.**