Walmart Inc Q3 2025 Earnings Call Transcript

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

Question: Kate McShane - Goldman Sachs Group, Inc. - Analyst : Hi, good morning. Thank you for taking our question. We wanted to focus our questions on general merchandise and gross margins. While general merchandise inflected positive in the quarter, it still seems like mix is a headwind based on everything you walked through today. Do you have a view on when this gets more balanced? And if we were to see a more balanced growth rate in general merch versus consumables and the growth of the alternative revenue businesses, what could gross margin expansion look like?

Question: Michael Lasser - UBS Investment Bank - Analyst : Good morning. Thank you so much for taking my question. What is Walmart finding out about its ability to drive steady growth in the core business while reinvesting back in areas like price and wages to lay the foundation for the future? And as the company generates more evidence of the growth of the emerging alternative revenue streams, does it make sense to invest even more in these areas or are there diminishing returns such that the overall enterprise wide profit growth can accelerate next year and beyond even as you make sizable investments back in the business? Thank you so much.

Question: Simeon Gutman - Morgan Stanley - Analyst : Good morning. Hi, everyone. I wanted to talk about the top line, which it looks like it accelerated Q3 versus Q2 the underlying run rate. There were some storms, and I know you mentioned port strike. Can you talk about the underlying inflection you're seeing? What do we attribute it to? I don't know if it's merchandising, marketplace, membership, all of the above. And have we inflected? Does it feel like we've inflected to a higher growth rate? Thank you.

Question: Christopher Horvers - JPMorgan Chase & Co. - Analyst : Thanks. Good morning, everybody. Can you speak to the changes in the 4Q operating income guide relative to where you started the year ex the FX change? To what extent did you change the top line outlook overall and in the US? Then you called out Sam's wage investment. But was there any changes in your expectation around gross margin given what you're seeing in the operating profit pools and 4Q is a big spike in terms of volume. So could that tilt the US e-commerce business to profitability? Thank you.

Question: Robby Ohmes - BofA Securities - Analyst : Well, good morning. Thanks for, thanks for taking my question. Doug, this may be for you. I get a lot of questions on the share gains with upper-income consumers you guys keep talking about. I was hoping you could sort of talk about it across three dimensions: grocery versus general merchandise with that upper income consumer, price driving that versus convenience with that consumer, and then sort of stores versus this huge marketplace growth in terms of driving the upper income consumer.

Question: Krisztina Katai - Deutsche Bank AG - Analyst : Hi, good morning, Doug and John David. I wanted to dig into the strength of e-commerce a little bit. I was curious if you could talk about what you think is a sustainable level of growth on a go-forward basis? Clearly, it's a much larger business, but you have a lot more that are driving it as well, whether we think about marketplace and membership. But just how do you see the rapid expansion of marketplace sellers and SKUs contribute to both e commerce growth? And as we think about improving the profitability over the next several quarters? And as part of that, can you talk about general merchandise performance, what you saw both in stores and in the marketplace? And then just from an assortment perspective, as we think about newness and innovation that you called out, just what specifically are you excited most about holiday? Thank you.

Question: Scot Ciccarelli - Truist Securities, Inc. - Analyst : Good morning guys. So I think you've given us some numbers previously on how much of your EBIT growth was coming from your ancillary revenue streams. So the questions are, do you have a number for that this quarter? And then is it possible to rank the drivers between advertising, membership 3P, et cetera? Thanks.

Question: Peter Keith - Piper Sandler & Co. - Analyst : Hey, thank you. Good morning. So maybe as a follow-up to Scott's question. You did flag general merchandise should continue to improve in the coming quarters. And I'm wondering if that continued improvement could have positive implications for some of these high-value revenue streams such as marketplace, which accelerated nicely here, and supplier advertising and the like.

Question: Peter Benedict - Robert W. Baird & Co. Incorporated - Analyst : Hi, good morning, everyone. Thanks for, thanks for taking my question. Really just around competition. I'm curious your observations, what you're seeing in terms of the competitive response to the share gains that continue to accrue to the business? I'm thinking primarily in the US, but really any comments around that would be helpful. Thanks.

Question: Karen Short - Melius Research - Analyst : Hi, thanks for taking my question and good to talk to you again. My -- I kind of have two interrelated questions. So your OpEx at 21.2%. Wondering what the potential is to get closer to 19% or get back to 19%? And obviously, that's in the context of e-com as it relates to losses. And then the second portion is just with all these alternative revenue streams that you have, at what point are you looking at a materiality conversation?

Question: Greg Melich - Evercore ISI Institutional Equities - Analyst : Hi, thanks guys. I wanted to follow up on the membership growth and the -- what's driving that there? And what sort of behavior you're seeing in terms of lift from people when they do sign up for Walmart Plus in particular? And what that flows through in terms of the importance of data and then using that in the new businesses?