tapebrief
WMT · Q2 2026

WMT · Q3 2025 Earnings

Bullish

Walmart

Reported November 20, 2025

30-second summary

Walmart's Q3 print did what Q2's did not: it raised full-year operating income growth alongside sales. The FY26 adjusted OI growth floor lifted 130bps to +4.8–5.5% cc (vs. +3.5–5.5% prior) while net sales growth was raised to +4.8–5.1% cc (from +3.75–4.75%) and adj. EPS to $2.58–$2.63 (from $2.52–$2.62). Q3 adjusted EPS of $0.62 cleared the $0.58–$0.60 guide (note: the $0.62 figure includes a $0.07 net add-back for incremental non-cash PhonePe share-based compensation expense), US comps came in at +4.5% with eCommerce +28%, and advertising re-accelerated to +53%. The tariff/claims absorption story that pressured earlier in the year is no longer the dominant frame — execution is.

Headline numbers

EPS

Q3 FY2025

$0.62

Revenue

Q3 FY2025

$179.50B

+5.8% YoY

Gross margin

Q3 FY2025

24.2%

Operating margin

Q3 FY2025

3.8%

Key financials

Q3 FY2025
MetricQ3 FY2025YoYQ2 FY2026QoQ
Revenue$179.50B+5.8%$177.40B+1.2%
EPS$0.62—$0.68-8.8%
Gross margin24.2%—24.5%-30bps
Operating margin3.8%—4.1%-30bps

Guidance

Walmart raised full-year FY2026 guidance for adjusted EPS, revenue growth, and operating income growth following strong Q3 FY2025 results that beat EPS expectations.

Guidance is issued for both next quarter and the full year. Both may appear below.

Actuals vs prior guidance

MetricPeriodPrior guideActualΔResult
Adjusted EPSQ3 FY2025$0.58 to $0.60$0.62+$0.02 above guideBeat

Changes to prior guidance

MetricPeriodPrior guideNew guideΔResult
Adjusted EPS
FY2026
$2.52 to $2.62$2.58 to $2.63midpoint raised $0.04; low raised $0.06; high raised $0.01Raised
Net Sales Growth (constant currency)
FY2026
3.75% to 4.75%4.8% to 5.1%+0.05 to +1.05 ptsRaised
Adjusted Operating Income Growth (constant currency)
FY2026
3.5% to 5.5%4.8% to 5.5%+1.3 pts at low endRaised

Segment performance

Q3 FY2025
SegmentQ3 FY2025YoY
Walmart U.S.$120.7B+5.1%
Walmart International$33.5B+10.8%
Sam's Club U.S.$23.6B+3.1%

Platform metrics

Q3 FY2025
SegmentQ3 FY2025
Global eCommerce Growth27%
Walmart U.S. eCommerce Growth28%
Walmart U.S. Comp Sales (ex-fuel)4.5%
Sam's Club Comp Sales (ex-fuel)3.8%
Global Advertising Business Growth53%
Walmart Connect Growth (ex-VIZIO)33%

Profitability

Q3 FY2025
SegmentQ3 FY2025
Return on Investment (TTM)14.8%
Return on Assets (TTM)8.4%

Management tone

The qualitative posture this quarter centers on confidence and finish-line framing.

No tariff framing as the gating constraint. This quarter the qualitative statements lead with "We're well-positioned for a strong finish to the year and beyond" and "We're gaining market share, improving delivery speed, and managing inventory well." The absence of tariff-as-existential-risk language, combined with the OI floor being lifted 130bps, signals management now views the related mechanics as a known quantity rather than an unprecedented swing factor.

The "profit faster than sales" algorithm reasserted. The FY26 OI growth midpoint is now +5.15% vs sales growth midpoint of +4.95%. In Q&A Michael Lasser was told directly that on a two-year basis, sales have grown about 5% and profits about 10% — "OI grows faster than sales" — and management characterized current investment levels as right-sized but "fluid."

Confident FY narrowing. The FY26 OI growth range collapsed from a 200bps band (+3.5–5.5%) to a 70bps band (+4.8–5.5%) — the narrowest forward guidance band Walmart has issued this year. Combined with the absence of any Q4 operating income range in the press release framework, the read is that visibility has improved on the FY but management is still choosing not to anchor Q4 OI specifically.

AI still not credited with quantified top-line impact. The watch flag from last quarter — would Sparky/AI agents get credited with measurable revenue impact — was not resolved. Q&A discussion remained centered on delivery cost per order (-40% for the third consecutive quarter), automation, and supply chain investment, not on customer-facing AI revenue contribution.

Q&A highlights

Kate McShane · Goldman Sachs

When will general merchandise growth become more balanced versus consumables/health & wellness headwinds? What could gross margin expansion look like if GM growth normalizes?

Management expressed enthusiasm for GM across all channels (first-party in stores/clubs, e-commerce, marketplace). Acknowledged ongoing GM deflation in low-to-mid single digits but highlighted positive unit growth in home, toys, hard lines, fashion, and apparel. Emphasized seasonal momentum heading into Q4 and multiple merchandising opportunities. All three segment leaders reinforced commitment to GM growth as part of overall strategy.

GM deflation in low to mid-single digits continuesGM comp sales positive with unit-led growthStrong categories: home, toys, hard lines, seasonal decor, apparel via marketplaceInternational GM growth strong in Mexico, India, China

Michael Lasser · UBS

What is Walmart learning about driving steady core business growth while reinvesting in price and wages? Should the company invest even more in alternative revenue streams or are there diminishing returns?

Management stated they believe they are investing the right amounts, though it's a fluid situation. Emphasized ability to grow profit faster than sales simultaneously with investments in pricing, wages, automation, and store/club remodels. Reiterated financial architecture of operating income growing faster than sales (~10% vs ~5% top line growth). Indicated execution is driving outperformance vs. being overly conservative with guidance.

Two-year track record: ~5% top-line growth, ~10% profit growthFinancial architecture: OI grows faster than sales, sales average ~4% with some varianceCapital deployed to automation, supply chain, store/club remodelsManagement actively monitors price gaps and employment market for flexibility

Simeon Gutman · Morgan Stanley

What is driving the apparent acceleration in underlying top-line run rate Q3 vs Q2? Is this a durable inflection or largely attributable to temporary events (storms, port strike)?

Management characterized momentum as consistent with prior quarters, not an inflection. Attributed most Q3 growth acceleration to one-time events (storms, port strike) which lifted sales but hurt OI. Noted Big Billion Days timing added ~60 bps of growth; same timing will work against Q4. Expressed view that underlying momentum remains stable, with Q4 expected to show similar consistency despite unfavorable calendar (fewer days Thanksgiving to Christmas).

Big Billion Days timing contributed ~60 bps to Q3 growthSame BBD timing will be a Q4 headwindUnderlying growth momentum characterized as 'very consistent'Q4 calendar headwind from fewer shopping days

Christopher Horvath · J.P. Morgan

How much did 4Q operating income guide change relative to year-start excluding FX? What changed in U.S. top-line outlook and gross margin expectations? Could 4Q volume spike push U.S. e-commerce to profitability?

Management indicated modest improvement in implied 4Q performance vs. prior quarter guidance, but no material change to base expectations. Noted shrink outperformance in U.S. and Sam's Club. Expressed confidence in eventual e-commerce profitability but stated they will not 'race to it'—willing to carry first-party mix or invest in speed if it delays profitability, as long-term returns justify investment. Emphasized omnichannel mix and newer business profitability offsetting e-commerce losses.

Modest improvement in implied 4Q vs. prior guidanceShrink performed better than expected in U.S. and Sam'sE-commerce losses continuing to narrow but profitability timing uncertainGlobal e-commerce losses narrowing, notably U.S.

Robbie Ohms · Bank of America

Can you explain the upper-income consumer share gains across three dimensions: grocery vs. GM, price vs. convenience drivers, and stores vs. marketplace channel contribution?

Management characterized answer as 'all-of-the-above.' Emphasized omnichannel advantage allowing appeal to higher-income customers through apparel/fashion marketplace expansion (historically weak categories for Walmart). Stressed both price and convenience matter, especially for time-sensitive upper-income cohort. Highlighted store-based quality offerings (organic, grass-fed beef, gluten-free) alongside delivery/pickup options. Noted marketplace growth, particularly in apparel, toys, and healthy food, as key to share gains. Sam's Club leadership noted their customer base skews higher-income and values price as core competitive advantage plus experience/convenience.

75% of share gains from households earning >$100KMarketplace driving apparel, toys, healthy food growth >20%Pickup/delivery has higher penetration in premium categories vs. in-storeSam's Club tier-based membership benefits (express delivery, no pickup fees) driving adoption

Answers to last quarter's watch list

Whether FY26 adjusted operating income growth holds at +3.5–5.5% cc. Resolved better than expected. The range was raised to +4.8–5.5% cc — the floor lifted 130bps and the band narrowed by 130bps. This is the cleanest evidence yet that the "profit faster than sales" algorithm is intact for FY26.
Resolved positively
Walmart US gross margin sequential trajectory. Consolidated GM came in at 24.2%, essentially flat YoY (+2bps per company disclosure). Walmart US segment gross profit rate increased 19bps. The OI guide raise occurred despite no consolidated GM expansion.
Continue monitoring
Whether Sparky / AI agents are credited with measurable revenue impact for the first time. No. Management did not quantify AI revenue contribution in either prepared release commentary or Q&A. Discussion remained focused on cost-side AI applications (delivery, supply chain, automation).
Continue monitoring
eCommerce contribution margin disclosure. Management again did not disclose segment-level eCommerce contribution margin. In Q&A, Horvath was told eCommerce losses are "narrowing, notably US" and delivery cost per order is down ~40% for the third consecutive quarter, but management explicitly said they "will not race to" profitability.
Resolved negatively
Q4 operating income guidance specificity. Walmart did not issue a standalone Q4 operating income range; the press release framework moved to FY-only forward guidance, with the FY OI band narrowed to 70bps. This is functionally a return to FY-only OI guidance cadence, not Q4 specificity.
Not resolved

What to watch into next quarter

Whether the FY26 OI guide is achieved at or above the +4.8% floor. With Q4 facing the BBD calendar reversal (~60bps headwind) and fewer Thanksgiving-to-Christmas shopping days, this is the cleanest test of whether the Q3 raise was credible or aspirational. A miss against +4.8% cc would unwind the "algorithm restored" narrative.

Sam's Club comp trajectory. Q3 comp of +3.8% ex-fuel is the softest segment data point of the quarter; prior-year comp benefited ~120bps from port disruptions, but the deceleration is the watch item heading into Q4.

Whether Q4 advertising growth holds above +35% ex-VIZIO. Walmart Connect ex-VIZIO at +33% in Q3; total ads +53% includes VIZIO lapping benefit. If ex-VIZIO advertising decelerates materially below +30% as VIZIO becomes a clean compare, the profit-pool diversification thesis weakens.

Whether eCommerce profitability gets a quantified milestone or remains qualitative. Three consecutive quarters of "narrowing losses, delivery cost down 40%" without a dollar disclosure. If Q4 produces another qualitative-only update despite the volume spike, management is signaling profitability is further off than the trajectory implies.

FY27 initial guide framing on the Q4 call. Whether management restores a Q1 FY27 operating income range alongside sales will signal whether tariff/RIM volatility is fully behind the model or remains a structural reason for guidance caution.

Sources

  1. Walmart FY26 Q3 Earnings Release — https://www.sec.gov/Archives/edgar/data/104169/000010416925000177/earningsreleasefy26q3.htm
  2. Walmart FY26 Q3 Earnings Call Transcript (prepared remarks and Q&A, November 20, 2025)

Get the next brief, free.

We publish analyst-grade earnings briefs the same day or morning after every call — headline numbers, segment KPIs, Q&A highlights, and tone analysis. Free during beta.

This is not investment advice.