Walmart Inc. recently released its 10-Q for the fiscal year ending January 31, 2026, showcasing its financial performance and strategic initiatives. Here are the key highlights from the report:
Growth Metrics: Comparable sales in the U.S., including fuel, increased by 4.4% and 3.8% for the three and six months ended July 31, 2025, respectively, compared to the same periods in the previous fiscal year. Walmart U.S. segment's comparable sales grew by 4.7% and 3.9% for the same periods, driven by growth in average ticket and transactions across all merchandise categories. * Sam's Club U.S. segment's comparable sales increased by 3.3% and 3.1% for the three and six months ended July 31, 2025, respectively, driven by growth in unit volumes, particularly in grocery, health and wellness, and general merchandise.
Margin Focus: Gross profit rate increased by 4 and 8 basis points for the three and six months ended July 31, 2025, respectively, primarily due to disciplined inventory management and growth in higher margin businesses at Walmart U.S. Operating income as a percentage of net sales decreased by 58 and 27 basis points for the three and six months ended July 31, 2025, respectively, primarily due to certain legal matters and higher self-insured general liability claims expenses in the U.S.
Returns and Capital Allocation: Return on Assets (ROA) was 8.3% and 6.4% for the trailing 12 months ended July 31, 2025 and 2024, respectively, while Return on Investment (ROI) remained flat at 15.1% for the same periods. The company allocated capital expenditures of $11.409 billion for the six months ended July 31, 2025, with a focus on supply chain, customer-facing initiatives, technology, and store and club remodels.
Free Cash Flow: * Walmart defines free cash flow as net cash provided by operating activities minus payments for property and equipment made in that period. For the six months ended July 31, 2025, the company reported net cash provided by operating activities of $18.352 billion.
The 10-Q also highlighted the company's commitment to helping customers save money and live better through everyday low prices, supported by everyday low costs, and its focus on serving customers through a seamless omnichannel experience.
The report emphasized the impact of the One Big Beautiful Bill Act (the "Tax Act") on the company's results, 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.
Walmart's financial priorities are centered around growth, margin improvement, and returns, with a focus on serving customers through an omnichannel business model, driving incremental margin accretion, and improving return on capital over time.
The market has reacted to these announcements by moving the company's shares 0.91% to a price of $96.98. If you want to know more, read the company's complete 10-Q report here.
