Walmart Inc.
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| ITEM 1. | BUSINESS |
General
Walmart Inc. ("Walmart," the "Company" or "we") is a people-led, technology-powered omnichannel retailer dedicated to helping people around the world save money and live better by providing the opportunity to shop in both retail stores and through eCommerce, and to access our other service offerings. Through innovation, we strive to continuously improve a customer-centric experience that seamlessly integrates our eCommerce and retail stores in an omnichannel offering that saves time for our customers. Each week, we serve approximately 280 million customers who visit more than 10,900 stores in 19 countries and through our numerous eCommerce websites and mobile applications.
Our strategy is to make every day easier for busy families, operate with discipline, sharpen our culture and become more digital, and make trust a competitive advantage. Making life easier for busy families includes our commitment to price leadership, which has been and will remain a cornerstone of our business, as well as increasing convenience to save our customers time. By leading on price, we earn the trust of our customers every day by providing a broad assortment of quality merchandise and services at everyday low prices ("EDLP"). EDLP is our pricing philosophy under which we price items at a low price every day so our customers trust that our prices will not change under frequent promotional activity. Everyday low cost ("EDLC") is our commitment to control expenses so our cost savings can be passed along to our customers.
Our operations comprise three reportable segments: Walmart U.S., Walmart International and Sam's Club U.S. Our fiscal year ends on January 31 for our United States ("U.S.") and Canadian operations. We consolidate all other operations generally using a one-month lag and on a calendar year basis. Our discussion is as of, and for the fiscal years ended, January 31, 2026 ("fiscal 2026"), January 31, 2025 ("fiscal 2025") and January 31, 2024 ("fiscal 2024"). During fiscal 2026, we generated total revenues of $713.2 billion, which primarily comprised net sales of $706.4 billion.
We maintain our principal offices in Bentonville, Arkansas. Our common stock trades on the Nasdaq Global Select Market under the symbol "WMT."
The Development of Our Company
The businesses conducted by our founders began in 1945 when Sam M. Walton opened a franchise Ben Franklin variety store in Newport, Arkansas. In 1946, his brother, James L. Walton, opened a similar store in Versailles, Missouri. Until 1962, our founders' business was devoted entirely to the operation of variety stores, at which time we began to open discount stores. We completed our initial public offering in 1970. In 1983, we opened our first Sam's Club, and in 1988, we opened our first supercenter. In 1998, we opened our first Walmart Neighborhood Market. In 1991, we began our first international initiative when we entered into a joint venture in Mexico and, as of January 31, 2026, our Walmart International segment conducted business in 18 countries.
In 1996, we began our first eCommerce initiative by creating both walmart.com and samsclub.com. Since then, our eCommerce presence has continued to grow. In 2007, leveraging our physical stores, walmart.com launched its Site-to-Store service, enabling customers to make a purchase online and pick up merchandise in stores. Today, customers can access pickup or delivery services at over 8,400 locations globally, reflecting our ability to leverage our store and club footprint to expand customer access. In 2018, we expanded our eCommerce and digital presence through acquisitions with our majority stakes in Flipkart and PhonePe in India. We continue to heavily invest in omnichannel and eCommerce innovation, as well as supply chain capabilities, which enables us to leverage technology, talent and expertise, and expand our assortment and service offerings, including through the integration of advanced technologies such as AI.
We are enhancing our omnichannel capabilities through a combination of stores, eCommerce websites, mobile applications and service offerings, as well as our supply chain, combined with approximately 2.1 million associates as of January 31, 2026, to better serve our customers. Our strategies increasingly include the use of AI-powered tools to support customer and member-facing experiences, associate productivity and operational efficiency across our ecosystem. Together, these elements produce a global retail ecosystem that we believe allows customers to view Walmart as their primary retail destination. As we execute on our strategy globally, our business continues to expand through offerings such as membership, advertising, marketplace and fulfillment services, and financial services. These offerings represent mutually reinforcing pieces of our omnichannel model centered on our customers around the world who are increasingly seeking convenience.
Information About Our Segments
We are engaged in global operations of retail, wholesale and other units, as well as eCommerce, located throughout the U.S., Africa, Canada, Central America, Chile, China, India and Mexico. Our operations are conducted in three reportable segments: Walmart U.S., Walmart International and Sam's Club U.S., which are further described below. Each segment contributes to the Company's operating results differently. However, each has generally maintained a consistent contribution rate to the Company's net sales in recent years other than minor changes to the contribution rate for the Walmart International segment due to fluctuations in currency exchange rates. Additional information on our operating segments and geographic information is contained in Note 11 to our Consolidated Financial Statements.
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Walmart U.S. Segment
Walmart U.S. is our largest segment and operates 4,611 stores in the U.S., including in all 50 states, Washington D.C. and Puerto Rico. Walmart U.S. is a mass merchandiser of consumer products, operating under the "Walmart" and "Walmart Neighborhood Market" brands, as well as walmart.com and the Walmart mobile application. Walmart U.S. had net sales of $483.0 billion for fiscal 2026, representing 68% of our fiscal 2026 consolidated net sales, and had net sales of $462.4 billion and $441.8 billion for fiscal 2025 and 2024, respectively.
Omnichannel. Walmart U.S. provides a convenient and seamless omnichannel experience to customers, integrating retail stores and eCommerce. Substantially all our stores provide same-day pickup and delivery, offering expedited delivery options that enable us to reach customers faster and in the ways they prefer, including in-home delivery and digital pharmacy fulfillment. Our Walmart+ membership offering provides enhanced omnichannel shopping benefits including unlimited free shipping on eligible items with no order minimum, unlimited delivery from store, fuel discounts, mobile Scan & Go and access to additional member benefits.
Merchandise and Other Offerings. Walmart U.S. does business primarily in three strategic merchandise units, listed below:
•Grocery consists of a full line of grocery items, including dry grocery, snacks, dairy, meat, produce, deli and bakery, frozen foods, alcoholic and nonalcoholic beverages, as well as consumables such as health and beauty aids, pet supplies, household chemicals, paper goods and baby products;
•General merchandise includes:
◦Entertainment (e.g., electronics, toys, seasonal merchandise, wireless, video games, movies, music and books);
◦Hardlines (e.g., automotive, hardware and paint, sporting goods, outdoor living and stationery);
◦Fashion (e.g., apparel for adults and children, as well as shoes, jewelry and accessories); and
◦Home (e.g., housewares and small appliances, bed and bath, furniture and home organization, home furnishings, home decor, fabrics and crafts).
•Health and wellness includes pharmacy, over-the-counter drugs and other medical products, and optical services.
Periodically, revisions are made to the categorization of the components comprising our strategic merchandise units. When revisions are made, the previous periods' presentation is adjusted to maintain comparability.
Brand name merchandise represents a significant portion of the merchandise sold in Walmart U.S. We also market lines of merchandise under our private brands, including brands such as: "Athletic Works," "bettergoods," "Equate," "Free Assembly," "Freshness Guaranteed," "George," "Great Value," "Holiday Time," "Hyper Tough," "Joyspun," "Kid Connection," "Mainstays," "Marketside," "No Boundaries," "onn.," "Ozark Trail," "Parent's Choice," "Sam's Choice," "Scoop," "Spring Valley," "Time and Tru," "Way to Celebrate" and "Wonder Nation." The Company also markets lines of merchandise under licensed brands, some of which include: "Avia," "Better Homes & Gardens," "Sofia Jeans by Sofia Vergara" and "The Pioneer Woman."
Other offerings in the Walmart U.S. business include advertising solutions for brands and online marketplace sellers, supply chain and fulfillment capabilities to online marketplace sellers, and data analytics and insights for suppliers and brands. Additional offerings include fuel, financial services and related products such as money orders, prepaid access, money transfers, check cashing, bill payment and certain types of installment lending.
Walmart International Segment
Walmart International is our second largest segment and operates 5,743 stores across 18 countries outside of the U.S. Walmart International operates through our wholly-owned subsidiaries in Canada, Chile, China, and Africa (which includes Botswana, Eswatini, Lesotho, Malawi, Mozambique, Namibia, South Africa and Zambia), and our majority-owned subsidiaries in India, as well as Mexico and Central America (which includes Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua).
Walmart International includes numerous formats divided into two major categories: retail and wholesale. These categories consist of many formats, including: supercenters, supermarkets, warehouse clubs (including our membership-only Sam's Club format) and cash and carry, as well as eCommerce through websites and mobile applications, including walmart.com.mx, walmart.ca, flipkart.com, PhonePe, samclub.cn and other sites. Walmart International had net sales of $130.4 billion for fiscal 2026, representing 19% of our fiscal 2026 consolidated net sales, and had net sales of $121.9 billion and $114.6 billion for fiscal 2025 and 2024, respectively.
Walmart International's purpose is to help millions of customers and members save money and live better every day by leveraging our global ecosystem and deep local expertise to provide access to affordable products and services. In addition, we share what we learn in our markets to help the enterprise innovate and grow even faster. We are deliberate about where and how we choose to operate to best enable long-term, sustainable and profitable growth.
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Omnichannel. Walmart International provides a convenient and seamless omnichannel experience to customers, integrating retail stores and eCommerce, such as through our pickup and delivery services from approximately 3,300 locations across all of our markets, including same-day and expedited delivery options across our markets. We continue to expand our marketplace offerings, which further enhances our fulfillment and advertising services.
Merchandise and Other Offerings. The merchandising strategy for Walmart International is similar to that of our operations in the U.S. in terms of the breadth and scope of merchandise offered for sale. While brand name merchandise accounts for a majority of our sales, we have both leveraged U.S. private brands and developed market specific private brands to serve our customers with high quality, low priced items. Along with the private brands we market globally, such as "Equate," "George," "Great Value," "Holiday Time," "Mainstays," "Marketside," "Member's Mark" and "Parent's Choice," our international markets have developed market specific brands including "Aurrera" and "Lider." In addition, we have developed and continue to grow our relationships with regional and local suppliers in each market to ensure reliable sources of quality merchandise that is equal to national brands at low prices. Consistent with its strategy, Walmart International continues to build mutually reinforcing businesses in areas such as advertising, marketplace and fulfillment services, financial services and healthcare.
Sam's Club U.S. Segment
Sam's Club U.S. is a membership-only warehouse club that operates 601 clubs in 44 states in the U.S. and Puerto Rico and also operates samsclub.com and the Sam's Club mobile application. Sam's Club U.S. had net sales of $93.0 billion for fiscal 2026, representing 13% of our consolidated fiscal 2026 net sales, and had net sales of $90.2 billion and $86.2 billion for fiscal 2025 and 2024, respectively. As a membership-only club, membership income is a significant component of the segment's operating income.
Membership. The following two membership tiers are available: Club membership for a $50 annual fee and Plus membership for a $110 annual fee. All memberships include a spouse/household card at no additional cost, and members may purchase add-on memberships for $45 each, subject to tier-based limits. Club members are eligible for free curbside pickup, and Plus members receive additional benefits including free delivery-from-club and free shipping on orders of $50 or greater, exclusive discounts and convenience offers, and the ability to shop before regular shopping hours. Members may also earn Sam's Cash rewards on qualifying purchases that can be redeemed for cash, used for purchases, or used to pay membership fees.
Omnichannel. Sam's Club U.S. provides a fast and seamless omnichannel experience to members, integrating physical clubs and eCommerce. Club-fulfilled curbside pickup and delivery provides fast and convenient ways to shop for members; Scan & Go mobile checkout and payment solution allows members to bypass the checkout line; and Just Go provides members with a friction-free exit experience.
Merchandise and Other Offerings. Sam's Club U.S. offers merchandise in the following four merchandise categories:
•Grocery consists of dairy, meat, bakery, deli, produce, dry, chilled or frozen packaged foods, alcoholic and nonalcoholic beverages, floral, snack foods, candy, other grocery items, as well as consumables such as health and beauty aids, protein and nutrition, paper goods, laundry and home care, baby care, pet supplies and other consumable items;
•General merchandise includes:
◦Home, hardlines and seasonal items (such as home improvement, outdoor living, gardening, furniture, apparel, jewelry, tools and power equipment, housewares, toys and mattresses); and
◦Technology and entertainment items (such as consumer electronics and accessories, software, video games, office supplies, appliances and third-party gift cards).
•Health and wellness includes pharmacy, optical and hearing services, and over-the-counter drugs; and
•Fuel and other categories.
Periodically, revisions are made to the categorization of the components comprising our strategic merchandise units. When revisions are made, the previous periods' presentation is adjusted to maintain comparability.
Within the categories above, the Sam's Club Member's Mark private label brand offers premium-quality, "Made Without" products across a wide range of categories at competitive, value-driven prices, designed to meet the needs of members. We continue to expand its assortment to reinforce Sam's Club value proposition to our members.
Other offerings in the Sam's Club U.S. business include advertising solutions for brands as well as operational insights and analytics for suppliers. Additional offerings include tire and battery installation services, photo and tech assistance, home and auto solutions, and certain financial services and related products.
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Additional Information About Our Business
Competition.
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Financial statements
data from SEC XBRL filings. Values are as-reported; restatements supersede originals. Values reported in .
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| ITEM 7. | MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
Overview
This discussion, which presents our results for the fiscal years ended January 31, 2026 ("fiscal 2026"), January 31, 2025 ("fiscal 2025") and January 31, 2024 ("fiscal 2024"), should be read in conjunction with our Consolidated Financial Statements and the accompanying notes. We intend for this discussion to provide the reader with information that will assist in understanding our financial statements, the changes in certain key items in those financial statements from period to period and the primary factors that accounted for those changes. We also discuss certain performance metrics that management uses to assess the Company's performance. Additionally, the discussion provides information about the financial results of each of the three segments of our business to provide a better understanding of how each of those segments and its results of operations affect the financial condition and results of operations of the Company as a whole.
Throughout this Item 7, we discuss segment operating income, comparable store and club sales and other measures. Management measures the results of the Company's segments using each segment's operating income, including certain corporate overhead allocations, as well as other measures. From time to time, we revise the measurement of each segment's operating income and other measures as determined by the information regularly reviewed by our chief operating decision maker.
In discussing our operating results, the term currency exchange rates refers to the currency exchange rates we use to convert the operating results for countries where the functional currency is not the U.S. dollar into U.S. dollars. We calculate the effect of changes in currency exchange rates as the difference between current period activity translated using the current period's currency exchange rates and the comparable prior year period's currency exchange rates. Additionally, no currency exchange rate fluctuations are calculated for non-USD acquisitions until owned for 12 months. Throughout our discussion, we refer to the results of this calculation as the impact of currency exchange rate fluctuations.
Recent Developments, Macroeconomic Conditions and Potential Impacts
We expect continued uncertainty in our business and the global economy due to the following factors: tariffs and trade restrictions; inflationary trends; fluctuations in global currencies; swings in macroeconomic conditions and their effect on consumer confidence; changes in employment trends; volatility in fuel prices; and supply chain pressures, any of which may impact our results. While we operate in a highly dynamic tariff environment, less than one third of what we sell in the U.S. is imported, with most of our imports coming from China, Mexico, Vietnam, India and Canada. Information on certain risks, factors, and uncertainties that can affect our operating results and an investment in our securities can be found herein under "Item 1A. Risk Factors."
Our net sales and gross profit margin are influenced in part by our pricing and merchandising strategies in response to cost increases. Those pricing strategies include, but are not limited to: absorbing cost increases instead of passing those cost increases on to our customers and members; reducing prices in certain merchandise categories; focusing on opening price points for certain food categories; and when necessary, passing cost increases on to our customers and members. Merchandising strategies include, but are not limited to: working with our suppliers to reduce product costs and share in absorbing cost increases; focusing on private label brands and smaller pack sizes; earlier-than-usual purchasing and in greater volumes or moderating purchasing in certain categories; and securing ocean carrier and container capacity. These strategies have and may continue to impact gross profit as a percentage of net sales.
In July 2025, the One Big Beautiful Bill Act (the "OBBB Act") was enacted, introducing a series of corporate tax changes in the U.S., including 100% bonus depreciation on qualified property and full expensing for research and development expenditures. The impacts of the OBBB Act were not material to our income tax expense or effective tax rate. Certain provisions decreased cash taxes paid in fiscal 2026 and may change the timing of cash tax payments in future periods.
For a detailed discussion on results of operations by reportable segment, refer to "Results of Operations" below.
Company Performance Metrics
We are committed to helping customers save money and live better through everyday low prices, supported by everyday low costs. At times, we adjust our business strategies to maintain and strengthen our competitive positions in the countries in which we operate. We define our financial priorities as follows:
•Growth - serve customers through a seamless omnichannel experience;
•Margin - improve our operating income margin through productivity initiatives as well as category and business mix; and
•Returns - improve our Return on Investment through margin improvement and disciplined capital spend.
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Growth
Our objective of prioritizing growth means we will focus on serving customers and members however they want to shop through our omnichannel business model. This includes increasing comparable store and club sales through increasing membership at Sam's Club U.S. and through Walmart+, accelerating eCommerce sales growth and expansion of omnichannel initiatives that complement our strategy.
Comparable sales is a metric that indicates the performance of our existing stores and clubs by measuring the change in sales for such stores and clubs, including eCommerce sales, for a particular period over the corresponding period in the previous year. Walmart's definition of comparable sales includes sales from stores and clubs open for the previous 12 months, including remodels, relocations, expansions and conversions, as well as eCommerce sales. We measure the eCommerce sales impact by including all sales initiated digitally, including omnichannel transactions which are fulfilled through our stores and clubs as well as certain other business offerings that are part of our ecosystem, such as our advertising net sales. Comparable sales are also referred to as "same-store" sales by others within the retail industry. The method of calculating comparable sales varies across the retail industry. As a result, our calculation of comparable sales is not necessarily comparable to similarly titled measures reported by other companies.
Our discussion of our comparable sales below refers to our calendar comparable sales calculated using our fiscal calendar, which may result in differences when compared to comparable sales using the retail calendar (also known as the 4-5-4 calendar) as provided in our quarterly earnings releases. We report on comparable sales in the U.S. as we believe it is a meaningful metric within the context of the U.S. retail market where there is a single currency, one inflationary market and generally consistent store and club formats from year to year.
Calendar comparable sales, as well as the impact of fuel, for fiscal 2026 and 2025, were as follows:
| Fiscal Years Ended January 31, | |||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||
| With Fuel | Fuel Impact | ||||||||||||||||||||||||
| Walmart U.S. | 4.3% | 4.8% | 0.0% | (0.1)% | |||||||||||||||||||||
Sam's Club U.S. | 2.9% | 4.7% | (1.9)% | (1.5)% | |||||||||||||||||||||
Walmart U.S. comparable sales increased 4.3% and 4.8% in fiscal 2026 and 2025, respectively. Comparable sales in fiscal 2026 were driven by growth in average ticket and transactions, and also reflected growth in unit volumes and strength in all merchandise categories. Comparable sales in fiscal 2025 were driven by growth in transactions and unit volumes, with strong sales in grocery and health and wellness. Walmart U.S. eCommerce sales positively contributed approximately 4.3% and 2.9% to comparable sales for fiscal 2026 and 2025, respectively. This growth reflects continued strength in customer and Walmart+ member engagement with omnichannel offerings, and was primarily driven by store-fulfilled pickup and delivery.
Sam's Club U.S. comparable sales increased 2.9% and 4.7% in fiscal 2026 and 2025, respectively. For fiscal 2026, comparable sales were driven by growth in unit volumes and transactions, reflecting strong sales in grocery, health and wellness and general merchandise. For fiscal 2025, comparable sales were driven by growth in transactions and unit volumes, with strong sales in grocery and health and wellness. Additionally, fiscal 2026 and 2025 growth was partially offset by lower fuel sales, negatively impacting comparable sales by 1.9% and 1.5%, respectively, primarily due to lower fuel prices. Sam's Club U.S. eCommerce sales positively contributed approximately 3.3% and 2.3% to comparable sales for fiscal 2026 and 2025, respectively, which reflects continued strength in member engagement with omnichannel offerings.
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Margin
Our objective of prioritizing margin focuses on growth with a focus on incremental margin accretion through a combination of productivity improvements as well as category and business mix. We invest in technology and process improvements to increase productivity, manage inventory and reduce costs and we operate with discipline by managing expenses and optimizing the efficiency of how we work. We measure operating discipline through expense leverage, which we define as net sales growing at a faster rate than operating, selling, general and administrative ("operating") expenses. Additionally, we focus on our mix of businesses, including expanding our ecosystem in higher margin areas, such as digital advertising. Our objective is to achieve operating income leverage, which we define as growing operating income at a faster rate than net sales.
| Fiscal Years Ended January 31, | |||||||||||||
| (Amounts in millions, except unit counts) | 2026 | 2025 | |||||||||||
| Net sales | $ | 706,413 | $ | 674,538 | |||||||||
| Percentage change from comparable period | 4.7 | % | 5.0 | % | |||||||||
Gross profit(1) as a percentage of net sales | 24.2 | % | 24.1 | % | |||||||||
Operating expenses as a percentage of net sales | 20.9 | % | 20.7 | % | |||||||||
| Operating income | $ | 29,825 | $ | 29,348 | |||||||||
| Operating income as a percentage of net sales | 4.2 | % | 4.4 | % | |||||||||
(1)Gross profit defined as net sales less cost of sales.
Gross profit as a percentage of net sales ("gross profit rate") increased 8 and 40 basis points for fiscal 2026 and 2025, respectively, when compared to the previous fiscal year. The increase in fiscal 2026 was primarily driven by the Walmart U.S. segment, due to disciplined inventory management, as well as growth in higher margin businesses globally. The increase in fiscal 2025 was primarily driven by the Walmart U.S. segment, due to managing prices aligned to our competitive historic price gaps, as well as growth in higher margin businesses globally. In both years, the increases were partially offset by mix shifts into lower margin merchandise categories across segments, as well as ongoing channel and format mix shifts in the Walmart International segment.
Operating expenses as a percentage of net sales increased 20 and 36 basis points for fiscal 2026 and 2025, respectively, when compared to the previous fiscal year. The increase for fiscal 2026 was primarily due to higher self-insured general liability claims expense in the U.S. of approximately $0.9 billion, influenced by rising costs to resolve claims across retail and related industries, a charge of $0.7 billion related to modification of certain share-based compensation arrangements for our PhonePe subsidiary and increased depreciation related to our capital investments. The increase for fiscal 2025 was primarily due to higher variable pay as a result of exceeding planned performance, increased marketing and higher depreciation expenses.
Operating income as a percentage of net sales decreased 13 basis points for fiscal 2026 and increased 15 basis points for fiscal 2025, respectively, primarily due to the factors described above and strong growth in membership income globally.
Returns
As we execute our financial framework, we believe our return on capital will improve over time. We measure return on capital with our return on investment and free cash flow metrics. In addition, we provide returns in the form of share repurchases and dividends, which are discussed in the Liquidity and Capital Resources section.
Return on Assets and Return on Investment
We include Return on Assets ("ROA") and Return on Investment ("ROI") as metrics to assess our return on capital. ROA is the most directly comparable measure based on our financial statements presented in accordance with generally accepted accounting principles in the U.S. ("GAAP") while ROI is considered a non-GAAP financial measure. Management believes ROI is a meaningful metric to share with investors because it helps investors assess how effectively Walmart is deploying its assets. Trends in ROI can fluctuate over time as management balances long-term strategic initiatives with possible short-term impacts.
Our calculation of ROI is considered a non-GAAP financial measure because it uses financial measures that differ from those used in ROA, the most directly comparable GAAP financial measure. ROA is consolidated net income for the period divided by average total assets for the period. We define ROI as operating income plus interest income, depreciation and amortization, and rent expense for the trailing 12 months divided by average invested capital during the period. We consider average invested capital to be the average of our beginning and ending total assets, plus average accumulated depreciation and amortization, less average accounts payable and average accrued liabilities for that period. Although ROI is a standard financial measure, numerous methods exist for calculating a company's ROI. As a result, the method used by management to calculate our ROI may differ from the methods used by other companies to calculate their ROI.
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The calculation of ROA and ROI, along with a reconciliation of ROI to the calculation of ROA, the most comparable GAAP financial measure, is as follows:
| Fiscal Years Ended January 31, | ||||||||||||||
| (Amounts in millions) | 2026 | 2025 | ||||||||||||
| CALCULATION OF RETURN ON ASSETS | ||||||||||||||
| Numerator | ||||||||||||||
| Consolidated net income | $ | 22,270 | $ | 20,157 | ||||||||||
| Denominator | ||||||||||||||
Average total assets(1) | $ | 272,746 | $ | 256,611 | ||||||||||
| Return on assets (ROA) | 8.2 | % | 7.9 | % | ||||||||||
| CALCULATION OF RETURN ON INVESTMENT | ||||||||||||||
| Numerator | ||||||||||||||
| Operating income | $ | 29,825 | $ | 29,348 | ||||||||||
| + Interest income | 368 | 483 | ||||||||||||
| + Depreciation and amortization | 14,203 | 12,973 | ||||||||||||
| + Rent | 2,434 | 2,347 | ||||||||||||
| = ROI operating income | $ | 46,830 | $ | 45,151 | ||||||||||
| Denominator | ||||||||||||||
Average total assets(1) | $ | 272,746 | $ | 256,611 | ||||||||||
+ Average accumulated depreciation and amortization(1) | 129,117 | 121,624 | ||||||||||||
- Average accounts payable(1) | 60,864 | 57,739 | ||||||||||||
- Average accrued liabilities(1) | 30,266 | 29,052 | ||||||||||||
| = Average invested capital | $ | 310,733 | $ | 291,444 | ||||||||||
| Return on investment (ROI) | 15.1 | % | 15.5 | % | ||||||||||
(1)The average is calculated using the account balance at the end of the current and prior comparative periods.
| As of January 31, | |||||||||||||||||||
| 2026 | 2025 | 2024 | |||||||||||||||||
| Certain Balance Sheet Data | |||||||||||||||||||
| Total assets | $ | 284,668 | $ | 260,823 | $ | 252,399 | |||||||||||||
| Accumulated depreciation and amortization | 134,587 | 123,646 | 119,602 | ||||||||||||||||
| Accounts payable | 63,061 | 58,666 | 56,812 | ||||||||||||||||
| Accrued liabilities | 31,187 | 29,345 | 28,759 | ||||||||||||||||
ROA was 8.2% and 7.9% for fiscal 2026 and 2025, respectively. The increase in ROA was primarily due to an increase in net income as a result of net increases in the fair value of our equity and other investments combined with higher operating income, offset by an increase in average total assets due to higher purchases of property and equipment. ROI was 15.1% and 15.5% for fiscal 2026 and 2025, respectively. The decrease in ROI was primarily due to an increase in average invested capital due to higher purchases of property and equipment. ROI benefited from increased operating income due to improved business performance, which was partially offset by the incremental non-cash share-based compensation charge at PhonePe as well as certain legal matters and other business restructuring charges.
Capital Allocation
Our strategy includes allocating the majority of our capital to higher-return areas focused on automation such as eCommerce, supply chain and store and club investments. The following table provides additional detail regarding our capital expenditures:
| (Amounts in millions) | Fiscal Years Ended January 31, | ||||||||||||
| Allocation of Capital Expenditures | 2026 | 2025 | |||||||||||
Supply chain, customer-facing initiatives, technology and other | $ | 16,468 | $ | 14,603 | |||||||||
| Store and club remodels | 5,571 | 5,552 | |||||||||||
| New stores and clubs, including expansions and relocations | 1,406 | 450 | |||||||||||
| Total U.S. | $ | 23,445 | $ | 20,605 | |||||||||
| Walmart International | 3,197 | 3,178 | |||||||||||
Total Capital Expenditures | $ | 26,642 | $ | 23,783 | |||||||||
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Free Cash Flow
Free cash flow is considered a non-GAAP financial measure. Management believes, however, that free cash flow, which measures our ability to generate additional cash from our business operations, is an important financial measure for use in evaluating the Company's financial performance. Free cash flow should be considered in addition to, rather than as a substitute for, consolidated net income as a measure of our performance and net cash provided by operating activities as a measure of our liquidity. See Liquidity and Capital Resources for discussions of GAAP metrics including net cash provided by operating activities, net cash used in investing activities and net cash used in financing activities.
We define free cash flow as net cash provided by operating activities in a period minus payments for property and equipment made in that period. Walmart's definition of free cash flow is limited in that it does not represent residual cash flows available for discretionary expenditures due to the fact that the measure does not deduct the payments required for debt service and other contractual obligations or payments made for business acquisitions. Therefore, we believe it is important to view free cash flow as a measure that provides supplemental information to our Consolidated Statements of Cash Flows.
Although other companies report their free cash flow, numerous methods may exist for calculating a company's free cash flow. As a result, the method used by management to calculate our free cash flow may differ from the methods used by other companies to calculate their free cash flow.
The following table sets forth a reconciliation of free cash flow, a non-GAAP financial measure, to net cash provided by operating activities, which we believe to be the GAAP financial measure most directly comparable to free cash flow, as well as information regarding net cash used in investing activities and net cash used in financing activities.
| Fiscal Years Ended January 31, | |||||||||||||||||||
| (Amounts in millions) | 2026 | 2025 | 2024 | ||||||||||||||||
| Net cash provided by operating activities | $ | 41,565 | $ | 36,443 | $ | 35,726 | |||||||||||||
| Payments for property and equipment | (26,642) | (23,783) | (20,606) | ||||||||||||||||
| Free cash flow | $ | 14,923 | $ | 12,660 | $ | 15,120 | |||||||||||||
Net cash used in investing activities(1) | $ | (26,350) | $ | (21,379) | $ | (21,287) | |||||||||||||
| Net cash used in financing activities | (13,553) | (14,822) | (13,414) | ||||||||||||||||
(1)"Net cash used in investing activities" includes payments for property and equipment, which is also included in our computation of free cash flow.
The increase in net cash provided by operating activities in fiscal 2026 is primarily due to an increase in cash provided by operating income, lower cash tax payments and the timing of certain payments. Free cash flow for fiscal 2026 increased when compared to fiscal 2025 due to an increase in cash provided by operating income, lower cash tax payments and timing of certain payments, partially offset by an increase of $2.9 billion in capital expenditures to support our omnichannel growth strategy. Net cash provided by operating activities for fiscal 2025 increased when compared to fiscal 2024 primarily due to an increase in cash provided by operating income and lapping the payment of accrued opioid legal charges in the prior year, partially offset by increased inventory purchases. Free cash flow for fiscal 2025 decreased when compared to fiscal 2024 due to an increase of $3.2 billion in capital expenditures to support our omnichannel growth strategy, partially offset by the increase in net cash provided by operating activities described above.
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Results of Operations
Consolidated Results of Operations
| Fiscal Years Ended January 31, | |||||||||||||||||||
| (Dollar amounts and retail square feet in millions) | 2026 | 2025 | 2024 | ||||||||||||||||
| Net sales | $ | 706,413 | $ | 674,538 | $ | 642,637 | |||||||||||||
| Percentage change from comparable period | 4.7 | % | 5.0 | % | 6.1 | % | |||||||||||||
Membership and other income(1) | 6,750 | 6,447 | 5,488 | ||||||||||||||||
Total revenues | 713,163 | 680,985 | 648,125 | ||||||||||||||||
| Percentage change from comparable period | 4.7 | % | 5.1 | % | 6.0 | % | |||||||||||||
Gross profit(2) | 171,018 | 162,785 | 152,495 | ||||||||||||||||
Operating expenses(2) | 147,943 | 139,884 | 130,971 | ||||||||||||||||
| Operating income | 29,825 | 29,348 | 27,012 | ||||||||||||||||
| Other (gains) and losses | (2,075) | 794 | 3,027 | ||||||||||||||||
| Consolidated net income | $ | 22,270 | $ | 20,157 | $ | 16,270 | |||||||||||||
| Percentage of net sales | |||||||||||||||||||
| Gross profit | 24.2 | % | 24.1 | % | 23.7 | % | |||||||||||||
Operating expenses | 20.9 | % | 20.7 | % | 20.4 | % | |||||||||||||
| Operating income | 4.2 | % | 4.4 | % | 4.2 | % | |||||||||||||
| Retail unit counts at period end | 10,955 | 10,771 | 10,616 | ||||||||||||||||
Retail square feet at period end | 1,057 | 1,053 | 1,053 | ||||||||||||||||
(1)Membership and other income includes membership fees and other items such as rental and tenant income, recycling income, gift card breakage income, as well as other income from corporate campus facilities.
(2)Gross profit is defined as net sales less cost of sales. Operating expenses refers to operating, selling, general and administrative expenses.
Our total revenues increased $32.2 billion or 4.7% and $32.9 billion or 5.1% for fiscal 2026 and 2025, respectively, when compared to the previous fiscal year. These increases in revenues were primarily due to increases in net sales, which increased $31.9 billion or 4.7% and $31.9 billion or 5.0% for fiscal 2026 and 2025, respectively, when compared to the previous fiscal year. The increases were primarily due to strong positive comparable sales across our U.S. segments and international markets. In fiscal 2026, growth was primarily driven by increases in average ticket and transactions, and also reflected growth in unit volumes, while fiscal 2025 growth was primarily driven by higher transactions and unit volumes. Both years include strength in eCommerce as well as strong sales in grocery and health and wellness, with fiscal 2026 also benefiting from improved sales in general merchandise. Net sales were negatively impacted by $2.8 billion and $3.2 billion of fluctuations in currency exchange rates during fiscal 2026 and 2025, respectively.
Membership and other income increased $0.3 billion and $1.0 billion for fiscal 2026 and 2025, respectively, primarily driven by growth in membership fee revenue globally, partially offset by decreases in certain other income items, including a reduction in recycling income in fiscal 2026.
Our gross profit rate increased 8 and 40 basis points for fiscal 2026 and 2025, respectively, when compared to the previous fiscal year. The increase in fiscal 2026 was primarily driven by the Walmart U.S. segment, due to disciplined inventory management, as well as growth in higher margin businesses globally. The increase in fiscal 2025 was primarily driven by the Walmart U.S. segment, due to managing prices aligned to our competitive historic price gaps, as well as growth in higher margin businesses globally. In both years, the increases were partially offset by mix shifts into lower margin merchandise categories across segments, as well as ongoing channel and format mix shifts in the Walmart International segment.
Our operating expenses as a percentage of net sales increased 20 and 36 basis points for fiscal 2026 and 2025, respectively, when compared to the previous fiscal year. The increase for fiscal 2026 was primarily due to higher self-insured general liability claims expense in the U.S. of approximately $0.9 billion, influenced by rising costs to resolve claims across retail and related industries, a charge of $0.7 billion related to modification of certain share-based compensation arrangements for our PhonePe subsidiary and increased depreciation related to our capital investments. The increase for fiscal 2025 was primarily due to higher variable pay as a result of exceeding planned performance, increased marketing and higher depreciation expenses.
Other gains and losses consist of certain non-operating items, such as changes in the fair value of our investments, which by their nature can fluctuate from period to period. Other gains and losses resulted in a net gain of $2.1 billion and a net loss of $0.8 billion in fiscal 2026 and 2025, respectively, primarily driven by changes in the fair value of our equity and other investments due to fluctuations in their underlying stock prices.
38
Our effective income tax rate was 24.4%, 23.4%, and 25.5% for fiscal 2026, 2025 and 2024, respectively. The increase in effective income tax rate in fiscal 2026 compared to fiscal 2025 is primarily due to the share-based compensation charge recorded at the Company's PhonePe subsidiary, which provided no tax benefit. The decrease in effective tax rate in fiscal 2025 compared to fiscal 2024 is primarily due to the tax impact on changes in fair value of our investments. Our effective income tax rate may also fluctuate as a result of various factors, including changes in our assessment of unrecognized tax benefits, valuation allowances, business operations, acquisitions, investments, entry into new businesses and geographies, intercompany transactions, changes in tax law, changes in the administrative practices, principles, and interpretations related to tax, and the mix and size of earnings among our U.S. operations and international operations, which are subject to statutory rates that are generally higher than the U.S. statutory rate. The reconciliation from the U.S. statutory rate to the effective income tax rates for fiscal 2026, 2025 and 2024 is provided in Note 8.
As a result of the factors discussed above, we reported $22.3 billion and $20.2 billion of consolidated net income for fiscal 2026 and 2025, respectively, which represent increases of $2.1 billion and $3.9 billion for fiscal 2026 and 2025, respectively, when compared to the previous fiscal year. Diluted net income per common share attributable to Walmart ("EPS") was $2.73, $2.41 and $1.91 for fiscal 2026, 2025 and 2024, respectively.
Walmart U.S. Segment
| Fiscal Years Ended January 31, | |||||||||||||||||||
| (Dollar amounts and retail square feet in millions) | 2026 | 2025 | 2024 | ||||||||||||||||
| Net sales | $ | 482,975 | $ | 462,415 | $ | 441,817 | |||||||||||||
| Net sales percentage change from comparable period | 4.4 | % | 4.7 | % | 5.1 | % | |||||||||||||
| Calendar comparable sales increase | 4.3 | % | 4.8 | % | 5.5 | % | |||||||||||||
Membership and other income | 2,624 | 2,594 | 1,985 | ||||||||||||||||
| Gross profit | 132,615 | 125,964 | 118,254 | ||||||||||||||||
Operating expenses | 110,081 | 104,676 | 98,085 | ||||||||||||||||
| Operating income | $ | 25,158 | $ | 23,882 | $ | 22,154 | |||||||||||||
| Percentage of net sales | |||||||||||||||||||
| Gross profit | 27.5 | % | 27.2 | % | 26.8 | % | |||||||||||||
Operating expenses | 22.8 | % | 22.6 | % | 22.2 | % | |||||||||||||
| Operating income | 5.2 | % | 5.2 | % | 5.0 | % | |||||||||||||
| Retail unit counts at period end | 4,611 | 4,605 | 4,615 | ||||||||||||||||
| Retail square feet at period end | 699 | 698 | 699 | ||||||||||||||||
Net sales for the Walmart U.S. segment increased $20.6 billion or 4.4% and $20.6 billion or 4.7% for fiscal 2026 and 2025, respectively, when compared to the previous fiscal year. The increases in net sales were primarily due to increases in comparable sales of 4.3% and 4.8% for fiscal 2026 and 2025, respectively. Comparable sales in fiscal 2026 were driven by growth in average ticket and transactions, and also reflected growth in unit volumes and strength in all merchandise categories. Comparable sales in fiscal 2025 were driven by growth in transactions and unit volumes, with strong sales in grocery and health and wellness. Walmart U.S. eCommerce sales positively contributed approximately 4.3% and 2.9% to comparable sales for fiscal 2026 and 2025, respectively. This growth reflects continued strength in customer and Walmart+ member engagement with omnichannel offerings, and was primarily driven by store-fulfilled pickup and delivery.
Membership and other income increased slightly for fiscal 2026 and increased $0.6 billion for fiscal 2025. In both years, the increases were primarily driven by double-digit growth in membership fee revenue from Walmart+. For fiscal 2026, the increase was partially offset by decreases in certain other income items, including a reduction in recycling income. Fiscal 2025 also benefited from higher recycling income compared to the previous fiscal year.
Gross profit rate increased 22 and 47 basis points for fiscal 2026 and 2025, respectively, when compared to the previous fiscal year. The increase for fiscal 2026 was primarily driven by disciplined inventory management and growth in higher margin businesses, partially offset by mix shifts into lower margin merchandise categories. The increase for fiscal 2025 was primarily due to managing prices aligned to our competitive historic price gaps and growth in higher margin businesses, partially offset by product mix shifts into lower margin categories.
Operating expenses as a percentage of segment net sales increased 15 and 44 basis points for fiscal 2026 and 2025, respectively, when compared to the previous fiscal year. The increase for fiscal 2026 was primarily due to higher self-insured general liability claims expense and increased depreciation related to our capital investments. For fiscal 2025, the increase was primarily due to increased marketing expenses, higher variable pay as a result of exceeding planned performance and increased depreciation expenses.
As a result of the factors discussed above, segment operating income increased $1.3 billion and $1.7 billion for fiscal 2026 and 2025, respectively, when compared to the previous fiscal year.
39
Walmart International Segment
| Fiscal Years Ended January 31, | |||||||||||||||||||||||
(Dollar amounts and retail square feet in millions) | 2026 | 2025 | 2024 | ||||||||||||||||||||
| Net sales | $ | 130,423 | $ | 121,885 | $ | 114,641 | |||||||||||||||||
| Percentage change from comparable period | 7.0 | % | 6.3 | % | 13.5 | % | |||||||||||||||||
| Membership and other income | 1,565 | 1,478 | 1,408 | ||||||||||||||||||||
| Gross profit | 27,847 | 26,618 | 24,810 | ||||||||||||||||||||
Operating expenses | 24,309 | 22,595 | 21,309 | ||||||||||||||||||||
| Operating income | $ | 5,103 | $ | 5,501 | $ | 4,909 | |||||||||||||||||
| Percentage of net sales | |||||||||||||||||||||||
| Gross profit | 21.4 | % | 21.8 | % | 21.6 | % | |||||||||||||||||
Operating expenses | 18.6 | % | 18.5 | % | 18.6 | % | |||||||||||||||||
| Operating income | 3.9 | % | 4.5 | % | 4.3 | % | |||||||||||||||||
| Retail unit counts at period end | 5,743 | 5,566 | 5,402 | ||||||||||||||||||||
| Retail square feet at period end | 278 | 274 | 274 | ||||||||||||||||||||
Next expected filings
- ~2026-06-05 10-Q expected by 2026-06-14 (in 21 days)
- ~2026-08-28 10-Q expected by 2026-09-06 (in 105 days)
- ~2026-12-02 10-Q expected by 2026-12-11 (in 201 days)
- ~2027-03-12 10-K expected by 2027-05-09 (in 301 days)
Predicted from historical filing cadence; not an SEC commitment.
Recent SEC filings
- 2026-04-30 8-K Other Events; Financial Statements and Exhibits
- 2026-04-23 DEF 14A Proxy Statement
- 2026-04-13 PRE 14A Preliminary Proxy Statement
- 2026-03-27 8-K Other Events
- 2026-03-13 10-K Annual Report
- 2026-03-13 8-K Other Events
- 2026-02-19 8-K Earnings Release; Financial Statements and Exhibits
- 2026-01-30 8-K/A Officer/Director Change
- 2026-01-16 8-K/A Officer/Director Change
- 2026-01-16 8-K Officer/Director Change; Financial Statements and Exhibits
- 2026-01-08 8-K Officer/Director Change; Financial Statements and Exhibits
- 2025-12-29 8-K Other Events
- 2025-12-03 10-Q Quarterly Report
- 2025-11-20 8-K Earnings Release; Delisting Notice; Regulation FD Disclosure; Financial Statements and Exhibits
- 2025-11-14 8-K Officer/Director Change; Financial Statements and Exhibits