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Item 2. Management’s Discussion and Analysis

2026-05-29 compared with 2025-12-03 · 142 added, 148 removed, 268 unchanged (52% of the section changed)

Management's Discussion and Analysis of Financial Condition and Results of Operations

This discussion, which presents Walmart Inc.'s ("Walmart," the "Company," "our," "us" or "we") results for periods occurring in the fiscal year ending January 31, 2026 ("fiscal 2026") and the fiscal year ended January 31, 2025 ("fiscal 2025"), should be read in conjunction with our Condensed Consolidated Financial Statements as of and for the three and nine months ended October 31, 2025, and the accompanying notes included in Part I, Item 1 of this Quarterly Report on Form 10-Q, as well as our Consolidated Financial Statements as of and for the year ended January 31, 2025, the accompanying notes and the related Management's Discussion and Analysis of Financial Condition and Results of Operations, contained in our Annual Report on Form 10-K for the year ended January 31, 2025.

This discussion, which presents Walmart Inc.'s ("Walmart," the "Company," "our," "us" or "we") results for periods occurring in the fiscal year ending January 31, 2027 ("fiscal 2027") and the fiscal year ended January 31, 2026 ("fiscal 2026"), should be read in conjunction with our Condensed Consolidated Financial Statements as of and for the three months ended April 30, 2026, and the accompanying notes included in Part I, Item 1 of this Quarterly Report on Form 10-Q, as well as our Consolidated Financial Statements as of and for the year ended January 31, 2026, the accompanying notes and the related Management's Discussion and Analysis of Financial Condition and Results of Operations, contained in our Annual Report on Form 10-K for the year ended January 31, 2026.

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 its chief operating decision maker.

Beginning in February 2026, the Company updated its segment allocation methodology for certain corporate overhead allocations and, accordingly, revised the prior period amounts for comparability.

Recent Developments, Macroeconomic Conditions and Potential Impacts

We expect continued uncertainty in our business and the global economy due to tariffs and trade restrictions;

We expect continued uncertainty in our business and the global economy due to the following factors:

tariffs and trade restrictions, including potential refunds;

inflationary trends;

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swings in macroeconomic conditions and their effect on consumer confidence;

volatility in employment trends;

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.

is imported, with most of our imports coming from China,Vietnam, Mexico, India and Canada.

We are committed to helping customers save money and live better through everyday low prices, supported by everyday low costs.

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Other Information ."

In July 2025, the One Big Beautiful Bill Act (the "Tax 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 Tax Act were not material to our income tax expense or effective tax rate.

We expect certain provisions will decrease cash taxes paid in the current fiscal year and may change the timing of cash tax payments in future periods.

The Company is participating in the process established by the U.S.

Customs and Border Protection for refunds of tariffs that the Company paid as the importer of record under the International Emergency Economic Powers Act.

The timing, amounts and ultimate resolution of any refunds remain uncertain and subject to ongoing legal and administrative developments.

Accordingly, the Company did not recognize any amounts related to these claims in the three months ended April 30, 2026.

For a detailed discussion on results of operations by reportable segment, refer to " Results of Operations " below.

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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.

This includes increasing comparable store and club sales through increasing membership through Walmart+ and at Sam's Club U.S., 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.

The retail industry generally reports comparable sales using the retail calendar (also known as the 4-5-4 calendar).

To be consistent with the retail industry, we provide comparable sales using the retail calendar in our quarterly earnings releases.

However, when we discuss our comparable sales below, we are referring to our calendar comparable sales calculated using our fiscal calendar, which may result in differences when compared to comparable sales using the retail calendar.

We focus on comparable sales in the U.S.

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 the three and nine months ended October 31, 2025 and 2024, were as follows:

Three Months Ended October 31, Nine Months Ended October 31,

Calendar comparable sales, as well as the impact of fuel, for the three months ended April 30, 2026 and 2025, were as follows:

Three Months Ended April 30,

2026 2025 2026 2025

With Fuel Fuel Impact With Fuel Fuel Impact

With Fuel Fuel Impact

4.3 % 3.1 % 0.3 % 0.0 %

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5.9 % 2.8 % 2.1 % (2.6) %

4.5 % 4.9 % (0.2) % (0.7) % 4.0 % 4.7 % (0.4) % (0.3) %

Comparable sales in the U.S., including fuel, increased 4.5% and 4.0% for the three and nine months ended October 31, 2025, respectively, when compared to the same periods in the previous fiscal year.

The Walmart U.S.

segment had comparable sales growth of 4.8% and 4.2% for the three and nine months ended October 31, 2025, respectively, driven by growth in average ticket and transactions, reflecting strength in all merchandise categories.

The Walmart U.S.

segment's eCommerce net sales positively contributed approximately 4.4% and 3.9% to comparable sales for the three and nine months ended October 31, 2025, respectively.

This growth reflects continued strength in customer and Walmart+ member engagement with omnichannel offerings, which was primarily driven by store-fulfilled pickup and delivery.

Comparable sales in the Sam's Club U.S.

segment increased 2.8% and 3.0% for the three and nine months ended October 31, 2025, respectively, with growth in unit volumes and transactions, reflecting strong sales in grocery, general merchandise and health and wellness.

The Sam's Club U.S.

segment's eCommerce net sales positively contributed approximately 3.0% and 3.3% to comparable sales for the three and nine months ended October 31, 2025, respectively, which outpaced the total segment growth as a result of lower fuel sales driven by lower fuel prices.

This growth reflects continued strength in member engagement with omnichannel offerings.

Our objective of prioritizing margin focuses on growth by driving incremental margin accretion through a combination of productivity improvements, as well as category and business mix.

comparable sales increased 4.3% for the three months ended April 30, 2026, driven by growth in transactions and average ticket, reflecting strength in grocery and general merchandise.

eCommerce sales positively contributed approximately 5.2% to comparable sales for the three months ended April 30, 2026.

This growth reflects continued strength in customer and Walmart+ member engagement with omnichannel offerings, which was primarily driven by store-fulfilled delivery.

Sam's Club U.S.

comparable sales increased 5.9% for the three months ended April 30, 2026, with growth in transactions and unit volumes, reflecting strength in grocery and general merchandise.

Additionally, higher fuel sales, driven by higher fuel prices and volumes, positively impacted comparable sales by 2.1% for three months ended April 30, 2026.

Sam's Club U.S.

eCommerce sales positively contributed approximately 3.1% to comparable sales for the three months ended April 30, 2026, reflecting continued strength in member engagement with omnichannel offerings, such as club-fulfilled delivery.

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 and marketplace.

Our objective is to achieve operating income leverage, which we define as growing operating income at a faster rate than net sales.

Three Months Ended October 31, Nine Months Ended October 31,

Additionally, we focus on our mix of businesses, including expanding our ecosystem in higher margin areas, such as digital advertising.

Our objective over the long-term is to achieve operating income leverage, which we define as growing operating income at a faster rate than net sales.

Three Months Ended April 30,

(Amounts in millions) 2026 2025

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(1) Gross profit defined as net sales less cost of sales.

Gross profit as a percentage of net sales ("gross profit rate") increased 2 and 6 basis points for the three and nine months ended October 31, 2025, respectively, when compared to the same periods in the previous fiscal year.

The increases were primarily due to the Walmart U.S.

segment, driven by disciplined inventory management and growth in higher margin businesses, partially offset by mix shifts into lower margin merchandise categories and the timing of Flipkart's The Big Billion Days ("BBD") sales event in the Walmart International segment, which primarily occurred in the fourth quarter of fiscal 2025 but mostly shifted to the third quarter of fiscal 2026.

Additionally, the increases were partially offset by ongoing channel and format mix shifts in the Walmart International segment.

Operating expenses as a percentage of net sales increased 28 and 33 basis points for the three and nine months ended October 31, 2025, respectively, when compared to the same periods in the previous fiscal year, primarily driven by a charge of $0.7 billion related to modification of certain share-based compensation arrangements for our PhonePe subsidiary.

The increase for the nine months ended October 31, 2025 was also impacted by higher self-insured general liability claims expense in the U.S.

of approximately $0.8 billion, influenced by rising costs to resolve claims across retail and related industries.

Operating income as a percentage of net sales decreased 22 and 26 basis points for the three and nine months ended October 31, 2025, respectively, primarily due to the factors described above.

Gross profit as a percentage of net sales ("gross profit rate") increased 6 basis points for the three months ended April 30, 2026, when compared to the same period in the previous fiscal year, primarily due to the Walmart U.S.

segment, driven by merchandise mix shifts and growth in higher margin businesses, including advertising, partially offset by higher fuel costs within our supply chain and increased eCommerce fulfillment costs in the Sam's Club U.S.

Operating expenses as a percentage of net sales increased 33 basis points for the three months ended April 30, 2026, when compared to the same period in the previous fiscal year, primarily driven by higher depreciation related to our capital investments, certain business reorganization charges of $0.2 billion within the Walmart U.S.

segment and Corporate and support related to strategic efforts to align our global platforms, as well as higher associate healthcare benefit costs related to increased enrollment and medical cost inflation in the U.S.

Operating income as a percentage of net sales decreased 8 basis points for the three months ended April 30, 2026, primarily due to the factors described above.

As we execute our financial framework, we believe our return on capital will improve over time.

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("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 deploys its assets.

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 metric because we calculate ROI using financial measures that exclude and include amounts that are included and excluded in ROA, the most directly comparable GAAP financial measure.

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 that 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 averaged accrued liabilities for that 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.

Although ROI is a standard financial measure, numerous methods exist for calculating a company's 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:

For the Trailing Twelve Months Ended October 31,

For the Trailing Twelve Months Ended April 30,

(Amounts in millions) 2026 2025

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Return on investment (ROI) 14.9 % 15.3 %

(1)` The average is based on the addition of the account balance at the end of the current period to the account balance at the end of the previous period and dividing by two.

As of October 31,

(1)` The average is calculated using the account balance at the end of the current and prior comparative periods.

As of April 30,

(Amounts in millions)

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Accrued liabilities 27,530 26,085 24,092

ROA was 8.4% and 7.8% for the trailing 12 months ended October 31, 2025 and 2024, 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 14.8% and 15.1% for the trailing 12 months ended October 31, 2025 and 2024, respectively.

The decrease in ROI was the result of 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 other business restructuring and certain legal matters.

ROA was 8.4% and 7.5% for the trailing 12 months ended April 30, 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, partially offset by an increase in average total assets due to higher purchases of property and equipment.

ROI was 14.9% and 15.3% for the trailing 12 months ended April 30, 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 non-cash share-based compensation charge at PhonePe in the trailing 12 months as well as business reorganization charges and certain legal matters.

Capital Allocation

Our strategy includes allocating our capital to higher-return areas such as automation and investments in stores and clubs.

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) Nine Months Ended October 31,

(Amounts in millions) Three Months Ended April 30,

Allocation of Capital Expenditures 2026 2025

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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.

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 provided by 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.

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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.

Nine Months Ended October 31,

Three Months Ended April 30,

(Amounts in millions) 2026 2025

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$ (6,737) $ (5,093)

Net cash used in financing activities (7,012) (9,673)

Net cash provided by financing activities 2,328 8

(1) Net cash used in investing activities includes payments for property and equipment, which is also included in our computation of free cash flow.

Net cash provided by operating activities was $27.5 billion for the nine months ended October 31, 2025, which represents an increase of $4.5 billion when compared to the same period in the previous fiscal year.

The increase was primarily due to timing of certain payments, increased cash provided by operating income and lower cash tax payments.

Free cash flow for the nine months ended October 31, 2025 was $8.8 billion, which represents an increase of $2.6 billion when compared to the same period in the previous fiscal year.

The increase in free cash flow was due to the increase in net cash provided by operating activities described above, partially offset by an increase of $1.9 billion in capital expenditures to support our investment strategy.

Net cash provided by operating activities was $4.7 billion for the three months ended April 30, 2026, which represents a decrease of $0.7 billion when compared to the same period in the previous fiscal year.

The decrease was primarily due to timing of inventory receipts, partially offset by timing of certain payments and an increase in cash provided by operating income.

Free cash flow for the three months ended April 30, 2026 was negative $1.9 billion, which represents a decrease of $2.4 billion when compared to the same period in the previous fiscal year.

The decrease in free cash flow was due to an increase of $1.7 billion in capital expenditures to support our omnichannel growth strategy combined with the decrease in net cash provided by operating activities described above.

Results of Operations

Consolidated Results of Operations

Three Months Ended October 31, Nine Months Ended October 31,

Three Months Ended April 30,

(Dollar amounts and retail square feet in millions) 2026 2025

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Membership and other income (1)

1,727 1,585 5,007 4,723

Total revenues 177,751 165,609

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Retail square feet at period end

1,053 1,050 1,053 1,050

(1) Membership and other income includes membership fees and other items such as rental and tenant income, recycling income and gift card breakage income, as well as other income from corporate campus facilities.

(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 $9.9 billion or 5.8% and $22.1 billion or 4.4% for the three and nine months ended October 31, 2025, respectively, when compared to the same periods in the previous fiscal year.

The increases were primarily due to strong positive comparable sales in our U.S.

segments and international markets driven by growth in average ticket and transactions, with strength in eCommerce.

Net sales growth across channels also reflected strong sales in grocery, health and wellness and general merchandise in our U.S.

Net sales for the three and nine months ended October 31, 2025 were negatively affected by $0.2 billion and $4.0 billion, respectively, in currency exchange rate fluctuations.

Membership and other income increased $0.1 billion or 9.0% and $0.3 billion or 6.0% for the three and nine months ended October 31, 2025, respectively, primarily due to strong growth in membership fee income globally, partially offset by decreases in other income items.

Gross profit rate increased 2 and 6 basis points for the three and nine months ended October 31, 2025, respectively, when compared to the same periods in the previous fiscal year.

The increases were primarily due to the Walmart U.S.

segment, driven by disciplined inventory management and growth in higher margin businesses, partially offset by mix shifts into lower margin merchandise categories and the timing of Flipkart's BBD sales event in the Walmart International segment, which primarily occurred in the fourth quarter of fiscal 2025 but mostly shifted to the third quarter of fiscal 2026.

Additionally, the increases were partially offset by ongoing channel and format mix shifts in the Walmart International segment.

The increase for the nine months ended October 31, 2025 was also impacted by higher self-insured general liability claims expense in the U.S.

of approximately $0.8 billion, influenced by rising costs to resolve claims across retail and related industries.

Our total revenues increased $12.1 billion or 7.3% for the three months ended April 30, 2026 when compared to the same period in the previous fiscal year.

The increase was primarily due to strong positive comparable sales in our U.S.

segments and international markets driven by growth in transactions.

eCommerce net sales grew $8.5 billion or 26% primarily driven by store and club-fulfilled delivery.

Net sales growth also reflected strong sales in grocery and general merchandise across our segments.

Net sales for the three months ended April 30, 2026 were positively affected by $2.3 billion in currency exchange rate fluctuations.

Membership and other income increased $0.4 billion or 27.0% for the three months ended April 30, 2026, reflecting 17.4% growth in membership fee revenue with strength across membership programs globally.

Additionally, other income for the three months ended April 30, 2026 benefited from certain miscellaneous income items, none of which are individually material.

Gross profit rate increased 6 basis points for the three months ended April 30, 2026, when compared to the same period in the previous fiscal year, primarily due to the Walmart U.S.

Other gains and losses consist of certain non-operating items, such as the change in the fair value of our investments and gains or losses on business dispositions, which by their nature can fluctuate from period to period.

Other gains and losses for the three and nine months ended October 31, 2025 consisted of net gains of $2.1 billion and $4.2 billion, respectively, compared to net losses of $0.1 billion and $0.5 billion for the same periods in the previous fiscal year.

Other gains and losses for the three months ended April 30, 2026 consisted of net gains of $0.3 billion, compared to net losses of $0.6 billion for the same period in the previous fiscal year.

These net gains and losses primarily consisted of changes in fair value of our equity and other investments driven by changes in their underlying stock prices.

Our effective income tax rate was 25.6% and 23.9% for the three and nine months ended October 31, 2025, respectively, compared to 22.7% and 23.8% for the same periods in the previous fiscal year.

The increase in effective tax rate is primarily due to the share-based compensation charge recorded at the Company's PhonePe subsidiary, which provided no tax benefit.

Our effective income tax rate was 23.2% for the three months ended April 30, 2026, compared to 22.6% for the same period in the previous fiscal year.

Our effective income tax rate may 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.

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statutory rate.

As a result of the factors discussed above, consolidated net income increased $1.4 billion and $3.1 billion for the three and nine months ended October 31, 2025, respectively, when compared to the same periods in the previous fiscal year.

Accordingly, diluted net income per common share attributable to Walmart was $0.77 and $2.20 for the three and nine months ended October 31, 2025, respectively, which represents an increase of $0.20 and $0.45 when compared to the same periods in the previous fiscal year.

Three Months Ended October 31, Nine Months Ended October 31,

As a result of the factors discussed above, consolidated net income increased $0.9 billion for the three months ended April 30, 2026, when compared to the same period in the previous fiscal year.

Accordingly, diluted net income per common share attributable to Walmart was $0.67 for the three months ended April 30, 2026, which represents an increase of $0.11 when compared to the same period in the previous fiscal year.

Three Months Ended April 30,

(Dollar amounts and retail square feet in millions) 2026 2025

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Membership and other income

665 618 1,950 1,835

Gross profit 32,529 30,811

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Net sales for the Walmart U.S.

segment increased $5.8 billion or 5.1% and $14.9 billion or 4.4% for the three and nine months ended October 31, 2025, respectively, when compared to the same periods in the previous fiscal year.

The increases were due to comparable sales of 4.8% and 4.2% for the three and nine months ended October 31, 2025, driven by growth in average ticket and transactions, reflecting strength in all merchandise categories.

segment increased $5.0 billion or 4.5% for the three months ended April 30, 2026, when compared to the same period in the previous fiscal year.

The increase was due to comparable sales of 4.3% for the three months ended April 30, 2026, driven by growth in transactions and average ticket, reflecting strength in grocery and general merchandise.

The Walmart U.S.

segment's eCommerce net sales positively contributed approximately 4.4% and 3.9% to comparable sales for the three and nine months ended October 31, 2025, respectively.

This growth reflects continued strength in customer and Walmart+ member engagement with omnichannel offerings, which was primarily driven by store-fulfilled pickup and delivery.

Membership and other income increased 7.6% and 6.3% for the three and nine months ended October 31, 2025, respectively, primarily driven by double-digit percentage growth in membership fee income from Walmart+.

Gross profit rate increased 19 and 24 basis points for the three and nine months ended October 31, 2025, when compared to the same periods in the previous fiscal year.

The increases were primarily driven by disciplined inventory management and growth in higher margin businesses, partially offset by mix shifts into lower margin merchandise categories.

Operating expenses as a percentage of net sales increased 15 and 22 basis points for the three and nine months ended October 31, 2025, respectively, when compared to the same periods in the previous fiscal year.

The increases were primarily due to higher self-insured general liability claims expense, increased depreciation expense related to our continued capital investments, as well as VIZIO operating costs following the acquisition in December 2024.

As a result of the factors discussed above, operating income increased $0.3 billion and $0.8 billion for the three and nine months ended October 31, 2025, respectively, when compared to the same periods in the previous fiscal year.

segment's eCommerce net sales positively contributed approximately 5.2% to comparable sales for the three months ended April 30, 2026.

This growth reflects continued strength in customer and Walmart+ member engagement with omnichannel offerings, which was primarily driven by store-fulfilled delivery.

Membership and other income increased 45.6% for the three months ended April 30, 2026, primarily driven by increases in certain miscellaneous income items, as well as double-digit percentage growth in membership fee revenue from Walmart+.

Gross profit rate increased 29 basis points for the three months ended April 30, 2026, when compared to the same period in the previous fiscal year.

The increase was primarily driven by merchandise mix shifts and growth in higher margin businesses, including advertising, partially offset by higher fuel costs within our supply chain.

Operating expenses as a percentage of net sales increased 56 basis points for the three months ended April 30, 2026, when compared to the same period in the previous fiscal year.

The increase was primarily due to increased depreciation expense related to our continued capital investments, higher associate healthcare benefit costs related to increased enrollment and medical cost inflation, as well as business reorganization charges.

As a result of the factors discussed above, operating income increased $0.2 billion for the three months ended April 30, 2026, when compared to the same period in the previous fiscal year.

Walmart International Segment

Three Months Ended October 31, Nine Months Ended October 31,

Three Months Ended April 30,

(Dollar amounts and retail square feet in millions) 2026 2025

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Retail square feet at period end 278 274

Net sales for the Walmart International segment increased $3.3 billion or 10.8% and $4.8 billion or 5.4% for the three and nine months ended October 31, 2025, respectively, when compared to the same periods in the previous fiscal year.

The increases were primarily due to positive comparable sales across our international markets, including strength in eCommerce and the shift in timing of Flipkart's BBD sales event, partially offset by negative fluctuations in currency exchange rates of $0.2 billion and $4.0 billion for the three and nine months ended October 31, 2025, respectively.

Gross profit rate decreased 68 and 72 basis points for the three and nine months ended October 31, 2025, respectively, when compared to the same periods in the previous fiscal year.

The decreases were primarily driven by ongoing channel and format mix shifts, including timing from BBD, partially offset by growth in higher margin businesses.

Operating expenses as a percentage of net sales increased 115 and 44 basis points for the three and nine months ended October 31, 2025, respectively, when compared to the same periods in the previous fiscal year, primarily due to a charge of $0.7 billion related to PhonePe's modification of certain share-based payment arrangements in contemplation of a potential initial public offering (refer to Note 8 ), partially offset by strong sales, BBD timing as well as format mix shifts.

As a result of the factors discussed above, operating income decreased $0.5 billion and $0.9 billion for the three and nine months ended October 31, 2025, when compared to the same periods in the previous fiscal year.

Net sales for the Walmart International segment increased $5.4 billion or 18.0% for the three months ended April 30, 2026, when compared to the same period in the previous fiscal year.

The increase was primarily due to positive comparable sales across our international markets, including strong eCommerce growth of $2.0 billion, and positive fluctuations in currency exchange rates of $2.3 billion.

Gross profit rate was flat for the three months ended April 30, 2026, when compared to the same period in the previous fiscal year.

The rate benefitted from improved eCommerce margins and business mix shifts, offset by ongoing format mix shifts.

Operating expenses as a percentage of net sales decreased 28 basis points for the three months ended April 30, 2026, when compared to the same period in the previous fiscal year, primarily due to disciplined cost controls and ongoing format mix shifts, partially offset by investments in strategic growth priorities in our Canada and Mexico markets.

As a result of the factors discussed above, operating income increased $0.3 billion for the three months ended April 30, 2026, when compared to the same period in the previous fiscal year.

Sam's Club U.S.

Three Months Ended October 31, Nine Months Ended October 31,

Three Months Ended April 30,

(Dollar amounts and retail square feet in millions) 2026 2025

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Net sales for the Sam's Club U.S.

segment increased $0.7 billion or 3.1% and $2.1 billion or 3.1% for the three and nine months ended October 31, 2025, respectively, when compared to the same periods in the previous fiscal year.

The increases were primarily due to comparable sales, including fuel, of 2.8% and 3.0% for the three and nine months ended October 31, 2025, respectively, with growth in unit volumes and transactions, reflecting strong sales in grocery, general merchandise and health and wellness.

segment increased $1.3 billion or 6.1% for the three months ended April 30, 2026, when compared to the same period in the previous fiscal year.

The increase was primarily due to comparable sales, including fuel, of 5.9% for the three months ended April 30, 2026, with growth in transactions and unit volumes, reflecting strength in grocery

and general merchandise.

Additionally, higher fuel sales, driven by higher fuel prices and volumes, positively impacted comparable sales by 2.1% for three months ended April 30, 2026.

Sam's Club U.S.

eCommerce net sales positively contributed approximately 3.0% and 3.3% to comparable sales for the three and nine months ended October 31, 2025, respectively, which outpaced the total segment comparable sales as a result of lower fuel sales driven by lower fuel prices.

This growth reflects continued strength in member engagement with omnichannel offerings.

Membership and other income increased 13.1% and 9.3% for the three and nine months ended October 31, 2025, respectively, when compared to the same periods in the previous fiscal year.

The increases were primarily due to growth in the membership base and Plus penetration, as well as breakage income related to unredeemed Sam's Cash rewards.

Gross profit rate increased 10 and 11 basis points for the three and nine months ended October 31, 2025, respectively, when compared to the same periods in the previous fiscal year.

The increase for the three months ended October 31, 2025 was primarily due to product mix changes and operational efficiencies.

The increase for the nine months ended October 31, 2025 was primarily due to higher margins in fuel, product mix changes and operational efficiencies, partially offset by higher eCommerce fulfillment costs and the impact of reorganization charges related to strategic supply chain decisions.

Operating expenses as a percentage of net sales increased 29 and 32 basis points for the three and nine months ended October 31, 2025, respectively, when compared to the same periods in the previous fiscal year.

The increase for the three months ended October 31, 2025 was primarily due to associate wage investments, lower fuel sales and higher self-insured general liability claims expense.

The increase for the nine months ended October 31, 2025 was primarily due to lower fuel sales, higher self-insured general liability claims expense and continued technology investments.

As a result of the factors discussed above, operating income increased slightly for both the three and nine months ended October 31, 2025, when compared to the same periods in the previous fiscal year.

eCommerce net sales positively contributed approximately 3.1% to comparable sales for the three months ended April 30, 2026, reflecting continued strength in member engagement with omnichannel offerings, such as club-fulfilled delivery.

Membership and other income increased 11.0% for the three months ended April 30, 2026, when compared to the same period in the previous fiscal year.

The increase was primarily due to growth in the membership base and Plus penetration, as well as increases in certain miscellaneous income items.

Effective May 1, 2026, Sam's Club U.S.

increased its annual membership fees for Club and Plus memberships from $50 to $60 and from $110 to $120, respectively.

The fee increase will benefit membership and other income in future periods, as membership fees are deferred and recognized ratably over the one-year membership term.

Gross profit rate decreased 26 basis points for the three months ended April 30, 2026, when compared to the same period in the previous fiscal year.

The decrease was primarily due to increased eCommerce fulfillment costs, driven by club-fulfilled delivery.

Operating expenses as a percentage of net sales was flat for the three months ended April 30, 2026, when compared to the same period in the previous fiscal year.

The rate benefitted from higher fuel sales, offset by increased costs related to club-fulfillment of delivery orders and higher associate healthcare benefit costs related to increased enrollment and medical cost inflation.

As a result of the factors discussed above, operating income increased slightly for the three months ended April 30, 2026, when compared to the same period in the previous fiscal year.

Liquidity and Capital Resources

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Net Cash Provided by Operating Activities

Nine Months Ended October 31,

Three Months Ended April 30,

(Amounts in millions) 2026 2025

Net cash provided by operating activities $ 4,738 $ 5,411

Net cash provided by operating activities for the nine months ended October 31, 2025 increased $4.5 billion when compared to the same period in the previous fiscal year.

The increase was primarily due to timing of certain payments, increased cash provided by operating income and lower cash tax payments.

Net cash provided by operating activities for the three months ended April 30, 2026 decreased $0.7 billion when compared to the same period in the previous fiscal year.

The decrease was primarily due to timing of inventory receipts, partially offset by timing of certain payments and an increase in cash provided by operating income.

Cash Equivalents and Working Capital Deficit

Cash and cash equivalents were $10.6 billion and $10.0 billion at October 31, 2025 and 2024, respectively.

Our working capital deficit was $22.8 billion as of October 31, 2025, which increased when compared to the $15.6 billion working capital deficit as of October 31, 2024.

The increase in our working capital deficit was primarily driven by the timing of certain payments described above and an increase in short-term borrowings for general corporate purposes, partially offset by an increase in receivables and inventories primarily related to sales growth.

Cash and cash equivalents were $10.7 billion and $9.3 billion at April 30, 2026 and 2025, respectively.

Our working capital deficit was $26.2 billion as of April 30, 2026, which increased when compared to the $22.7 billion working capital deficit as of April 30, 2025.

The increase in our working capital deficit was primarily driven by the timing of certain payments described above and an increase in short-term borrowings for general corporate purposes, partially offset by an increase in inventories and receivables primarily related to sales growth combined with higher cash balances.

We generally operate with a working capital deficit due to our efficient use of cash in funding operations, consistent access to the capital markets and returns provided to our shareholders in the form of cash dividends and share repurchases.

As of October 31, 2025 and January 31, 2025, cash and cash equivalents of $4.8 billion and $3.3 billion, respectively, may not be freely transferable to the U.S.

As of April 30, 2026 and January 31, 2026, cash and cash equivalents of $5.0 billion and $3.9 billion, respectively, may not be freely transferable to the U.S.

due to local laws or other restrictions or are subject to the approval of the noncontrolling interest shareholders.

Net Cash Used in Investing Activities

Nine Months Ended October 31,

Three Months Ended April 30,

(Amounts in millions) 2026 2025

Net cash used in investing activities $ (6,737) $ (5,093)

Net cash used in investing activities for the nine months ended October 31, 2025 increased $6.4 billion when compared to the same period in the previous fiscal year.

The increase is primarily due to the change in net proceeds received from the sale of certain strategic investments as well as increased payments for property and equipment.

Net Cash Used in Financing Activities

Nine Months Ended October 31,

Net cash used in investing activities for the three months ended April 30, 2026 increased $1.6 billion when compared to the same period in the previous fiscal year.

The increase was primarily due to increased payments for property and equipment.

Net Cash Provided by Financing Activities

Three Months Ended April 30,

(Amounts in millions) 2026 2025

Net cash used in financing activities $ (7,012) $ (9,673)

Net cash used in financing activities decreased $2.7 billion for the nine months ended October 31, 2025, when compared to the same period in the previous fiscal year.

The decrease is primarily due to proceeds from new long-term debt issued and higher short-term borrowings in the current fiscal year, primarily offset by increased share repurchases.

Net cash provided by financing activities $ 2,328 $ 8

Net cash provided by financing activities increased $2.3 billion for the three months ended April 30, 2026, when compared to the same period in the previous fiscal year.

The increase was primarily due to lower share repurchases and higher short-term borrowings, primarily offset by debt repayments in the current fiscal year.

In April 2026, the Company renewed and extended its existing 364-day revolving credit facility of $10.0 billion as well as its five-year credit facility of $5.0 billion.

In total, we had committed lines of credit in the U.S.

of $15.0 billion at October 31, 2025, all undrawn.

of $15.0 billion at April 30, 2026, all undrawn.

Long-term Debt

The following table provides the changes in our long-term debt for the nine months ended October 31, 2025:

The following table provides the changes in our long-term debt for the three months ended April 30, 2026:

(Amounts in millions) Long-term debt due within one year Long-term debt Total

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Currency and other adjustments

Balances as of October 31, 2025 $ 3,523 $ 34,445 $ 37,968

(15) (94) (109)

Balances as of April 30, 2026 $ 3,896 $ 36,887 $ 40,783

(1) Proceeds from issuance of long-term debt are net of deferred loan costs and any related discount or premium.

During the nine months ended October 31, 2025, our total outstanding long-term debt increased $2.0 billion, primarily due to the issuance of new long-term debt in April 2025 less current year debt repayments.

During the three months ended April 30, 2026, our total outstanding long-term debt increased $2.6 billion, primarily due to the issuance of new long-term debt in April 2026, less current year debt repayments.

Refer to Note 3 to our Condensed Consolidated Financial Statements for details.

Effective February 20, 2025, the Company approved the fiscal 2026 annual dividend of $0.94 per share, a 13% increase over the fiscal 2025 annual dividend of $0.83 per share.

Effective February 19, 2026, the Company approved the fiscal 2027 annual dividend of $0.99 per share, an increase over the fiscal 2026 annual dividend of $0.94 per share.

For fiscal 2027, the annual dividend was or will be paid in four quarterly installments of $0.2475 per share, according to the following record and payable dates:

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December 11, 2026 January 4, 2027

The dividend installments payable on April 7, 2025, May 27, 2025 and September 2, 2025 were paid as scheduled.

The dividend installments payable on April 6, 2026 and May 26, 2026 were paid as scheduled.

Company Share Repurchase Program

From time to time, the Company repurchases shares of its common stock under share repurchase programs authorized by the Company's Board of Directors.

All repurchases made during the nine months ended October 31, 2025 were made under the current $20 billion share repurchase program approved in November 2022, which has no expiration date or other restrictions limiting the period over which the Company can make repurchases.

As of October 31, 2025, authorization for $5.1 billion of share repurchases remained under the share repurchase program.

Any repurchased shares are constructively retired and returned to an unissued status.

All repurchases made during the three months ended April 30, 2026 prior to February 23, 2026 were made under the program in effect at the beginning of fiscal 2027.

In February 2026, the Company approved a new $30 billion share repurchase program, which beginning on February 23, 2026, replaced the previous share repurchase program.

As of April 30, 2026, authorization for $28.2 billion of share repurchases remained under the current share repurchase program.

We regularly review share repurchase activity and consider several factors in determining when to execute share repurchases, including, among other things, current cash needs, capacity for leverage, cost of borrowings, our results of operations and the market price of our common stock.

We anticipate that a majority of the ongoing share repurchase program will be funded through the Company's free cash flow.

The following table provides, on a settlement date basis, share repurchase information for the nine months ended October 31, 2025 and 2024:

Nine Months Ended October 31,

The following table provides, on a settlement date basis, share repurchase information for the three months ended April 30, 2026 and 2025:

Three Months Ended April 30,

(Amounts in millions, except per share data) 2026 2025

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Total amount paid for share repurchases $ 2,080 $ 4,555

During the nine months ended October 31, 2025, the Company repurchased $7.0 billion in shares of its common stock, an increase of $4.0 billion as compared to the same period in the previous fiscal year.

The increase was primarily driven by opportunistic prices during the first quarter of fiscal 2026 as part of the Company's long-term strategy.

During the three months ended April 30, 2026, the Company repurchased $2.1 billion in shares of its common stock, a decrease of $2.5 billion as compared to the same period in the previous fiscal year.

The decrease was primarily driven by opportunistic prices during the first quarter of fiscal 2026 as part of the Company's long-term strategy.

Material Cash Requirements

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We have strong commercial paper and long-term debt ratings that have enabled and should continue to enable us to refinance our debt as it becomes due at favorable rates in capital markets.

As of October 31, 2025, the ratings assigned to our commercial paper and rated series of our outstanding long-term debt were as follows:

As of April 30, 2026, the ratings assigned to our commercial paper and rated series of our outstanding long-term debt were as follows:

Rating agency Commercial paper Long-term debt

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In Note 5 to our Condensed Consolidated Financial Statements, which is captioned "Contingencies" and appears in Part I of this Quarterly Report on Form 10-Q under the caption " Item 1.

Financial Statements ," we discuss, under the sub-captions " Settlement of Certain Opioid-Related Matters, " and " Ongoing Opioid-Related Litigation, " certain opioid-related matters, as well as the Prescription Opiate Litigation, and other matters, including certain risks arising therefrom.

Financial Statements ," we discuss, under the sub-caption " Opioid-Related Litigation " certain opioid-related matters and certain risks arising therefrom.

In Note 5 , we discuss, " Asda Equal Value Claims " the Company's indemnification obligation for the Asda Equal Value Claims matter, " Money Transfer Agent Services Matter, " a government investigation by the U.S.

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In Note 5 we also discuss a show cause notice and requests issued by the Directorate of Enforcement to Flipkart regarding Foreign Direct Investment rules and regulations in India and an India Antitrust Matter.

We reference various legal proceedings related to the Prescription Opiate Litigation, the DOJ Opioid Civil Litigation, Opioids-Related Securities Class Actions and False Claims Act Litigation;

We reference various legal proceedings related to the Prescription Opiate Litigation, the DOJ Opioid Civil Litigation and False Claims Act Litigation;

Asda Equal Value Claims;

Money Transfer Agent Services Matter;

Driver Platform Matters;

Federal Trade Commission and State Attorneys General Driver Platform Litigation;

Mexico Antitrust Matter;

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis