Walmart Inc Q2 2025 Earnings Call Summary

The following is excerpted from the question-and-answer section of the transcript.

Question: Michael Lasser - UBS - Analyst : Good morning. Thanks much for taking my question. Can you frame or quantify how you have factored in things like the election and other distracting events into your guidance for 3Q and 4Q? And if you haven't seen an impact from these distractions as of yet, whereas many others who are serving the consumer have, why would you experience an impact from that as you move through the rest of the year? Thank you very much.

Question: Oliver Chen - TD Cowen - Analyst : Hi, thank you. In your remarks, you mentioned that you aren't experiencing a weaker consumer. What does your guidance assume in terms of your outlook on the consumer? And related to that is general merchandise, the flat performance was impressive given the trends and what we're seeing. What do you see happening within that category? And will that momentum continue? Does your guidance assume that stays flattish? Lastly, just on e-commerce, you continue to make really nice strides on the density and scale. What's ahead in terms of profitability drivers and how much more room there is for delivery density? I imagine that can just get better and better. Thank you.

Question: Kate McShane - Goldman Sachs - Analyst : Hi, good morning. Thanks for taking our question. Membership growth was noted as one of the drivers of operating income dollar growth during the quarter. And there did seem to be an acceleration from Q1 to Q2, especially at Sam's Club. I wondered if there was something meaningful that had changed from a quarterly standpoint or a sequential standpoint. And you like increased marketing as part of the reason that operating expenses de-leveraged in the quarter, did that have anything to do with some of the increased membership that we saw? Thank you.

Question: Rupesh Parikh - Oppenheimer - Analyst : Good morning. Thanks for taking my question. So I just wanted to go back to the momentum you're seeing in the health and wellness category. Just want to get a sense of how you guys are thinking about the sustainability of strength that you're seeing there. Anything outside of GLP-1 that's contributed to that momentum. And then just from a gross margin perspective, as you look at stronger growth in grocery and within health and wellness, how is the mix -- product mix impact on gross margins playing out versus how you thought about for the year?

Question: Rupesh Parikh - Oppenheimer - Analyst : Thank you.

Question: Simeon Gutman - Morgan Stanley - Analyst : Hi. Good morning, and thanks, everyone. My question is on the spread between US EBIT growth and US comps or US net sales. It looks like the first half of the year, you're running [4%-ish] in change comps, and you're doing EBIT growth of about 7% to 8%. So about a 3- to 4-point spread. My question is two parts. First, are there active decisions of reinvestment that we can do both reinvest and grow? Curious how much reinvestment is happening? And second, that 3- to 4-point spread, is that representative of the businesses' run rate? Or is this still scaling and then that spread should continue to widen going forward? Thank you.

Question: Christopher Horvers - JPMorgan - Analyst : Thanks. Good morning, everybody. You talked about the US e-commerce business turning profitable. Perhaps in the next one to two years, after 2Q, is there any refinement to that timeframe? And then related to that, in the first quarter, you talked about, I think, total contribution, $300 million to $400 million in alternative profit. Pool growth that you saw in that first quarter, is that improving? And can you talk about how that arc of improvement trends as we look out into the future? Thank you.

Question: Krisztina Katai - Deutsche Bank - Analyst : Hi, good morning, and congrats on really strong results. I wanted to ask on the momentum in membership. You have done a lot to enhance the Walmart+ business. You added many new features. So one is, what have you found to be working best not only in attracting but also retaining members? And then second, can you update us on the uptake of the Walmart+ Assist program and how you think about the sustainability of that growth as we think about the low-income consumer taking advantage also convenience and value? Thank you.

Question: Chuck Grom - Gordon Haskett - Analyst : Thanks, good morning. Great results. On automation, where are we on that journey today? And how much of the benefits are we seeing in the P&L over the past couple of quarters versus what you expect to flow through over the next several years? And then separately, August comps sound solid. Any early thoughts on back to school, back to college? Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 15, 2024 / 12:00PM, WMT.N - Q2 2025 Walmart Inc Earnings Call

Question: Corey Tarlowe - Jefferies - Analyst : Great. Thank you and good morning. So Doug, a couple of quarters ago, you had mentioned to us that deflation could be a real possibility. And now in the prepared remarks today, I think for the quarter, both Walmart US and Sam's Club, you mentioned were slightly deflationary overall. So I'm wondering what do you think this means for the trajectory for pricing as we look ahead what does it mean for your price gaps? And then additionally, how do you think private label plays into this? I think we've continued to see those price gaps widen as well and that also is continuing to increase in terms of penetration in the business. So how do you see that adoption unfolding in the midst of in the broader context of pricing potentially being slightly deflationary?

Question: Paul Lejuez - Citi - Analyst : Okay. Thank you, guys. Following the gross margin expansion in the first half, how are you thinking about gross margin in the second half, which drivers of the first half margin expansion stay the same, which fall off? And are there any new drivers of gross margin that we might see pop up in the second half? And then maybe related to that, what are your expectations for the competitive landscape relative to what you've seen the past several months? Thanks.

Question: Paul Lejuez - Citi - Analyst : What does BBD stand for?

Question: Kelly Bania - BMO Capital Markets - Analyst : Hi, good morning. Thanks for taking our question. I was curious, you talked a lot about the share gains by income cohorts and how that's primarily driven by upper income households. But would you be willing to kind of give color on comps by income cohorts? And I think a lot of investors are just really curious if you are growing comps with low-income households or how much of comps are being driven by that upper income? And maybe if you can tie in any color between grocery spend and general merchandise cohort, is it really that upper income cohort that's starting to turn the needle here on general merchandise? Any color there, I think, would be helpful.

Question: Robbie Ohmes - BofA Global Research - Analyst : I just was wondering from the team, with the back half guidance, I'd be curious to get your thoughts on what kind of holiday Walmart is planning for this year, in the US and even globally?