Walmart Inc FY2024 Financial Performance: Revenue Up 6.3%, Net Income $16.3B

Executive Summary

Walmart Inc. reported strong financial results for FY2024, with total revenue increasing by 6.3% to $648.1 billion compared to the previous year. Net income grew significantly to $16.27 billion, representing a 44.2% increase YoY, driven by improved operational efficiencies and higher sales across core segments. The company’s cash flow from operations also showed robust growth, reaching $35.73 billion, supporting ongoing investments, debt repayment, and shareholder returns. These results underscore Walmart’s resilient business model and strategic focus on eCommerce integration and international growth.

Key Metrics

Management Discussion and Analysis

Walmart’s FY2024 results reflect a strategic emphasis on expanding its eCommerce platform, which contributed approximately $65.4 billion in online sales, up from $47.8 billion in FY2023, a growth of 36.7%. The U.S. segment remains the largest revenue contributor, with $441.8 billion, driven by increased traffic and higher basket size. International markets, notably Mexico and Canada, also delivered solid growth, with revenues of $49.7 billion and $22.6 billion respectively. Operating margin improved due to cost efficiencies, despite inflationary pressures. The company’s focus on supply chain optimization and digital transformation has been pivotal in achieving margin expansion and profit growth.

Income Statement Analysis

Revenue grew 6.3% YoY, primarily due to same-store sales growth and eCommerce expansion. Gross profit increased by 5.9%, reaching $158.1 billion, with a gross margin of approximately 24.4%, slightly down from 24.7% last year due to higher transportation and labor costs. Operating income rose 32.1% to $27.01 billion, supported by lower operating expenses as a percentage of sales. Net income surged 44.2% YoY, driven by higher sales and improved margins. Earnings per share increased from $1.43 to $1.92, reflecting share repurchases and operational leverage.

Balance Sheet Analysis

Cash and cash equivalents increased by 14.3% to $9.94 billion, supporting liquidity and investment initiatives. Receivables grew 10.9% to $8.80 billion, aligning with higher sales volume. Inventories decreased slightly to $54.89 billion, indicating tighter inventory management. Total assets increased by 3.7% to $252.4 billion. Long-term debt increased modestly to $36.13 billion, but leverage remained manageable with a debt-to-equity ratio of approximately 0.43. Shareholders’ equity rose 9.4% to $83.86 billion, reflecting retained earnings growth and share buybacks.

Cash Flow Analysis

Operating cash flow improved significantly by 24.0% to $35.73 billion, driven by higher net income and working capital efficiencies. Capital expenditures increased to $20.61 billion, primarily for store remodels, distribution centers, and technology upgrades. The company continued its share repurchase program, buying back $2.78 billion worth of stock, reducing shares outstanding to approximately 8.05 billion. Dividends declared per share increased to $0.76, reflecting ongoing commitment to shareholder returns. Debt repayment remained disciplined, with $4.03 billion in principal repaid during FY2024.

Ratios & DuPont Analysis

Net profit margin improved to 2.51% from 1.85% last year, supported by operational efficiencies. Return on assets (ROA) increased to 6.4% from 4.6%, driven by higher net income and asset turnover. Return on equity (ROE) rose to 19.5% from 15.2%, reflecting retained earnings growth and effective leverage. Asset turnover remained stable at 2.57 times. The equity multiplier was consistent at 2.4, indicating balanced leverage levels conducive to sustained growth.

Risk Factors

Walmart faces ongoing regulatory scrutiny related to labor practices, supply chain compliance, and data security. Market competition from Amazon, Target, and regional retailers poses strategic challenges. Macro-economic factors such as inflation, currency fluctuations, and geopolitical tensions could impact margins and international operations. Operational risks include supply chain disruptions and cybersecurity threats. The company’s substantial debt levels require disciplined financial management to mitigate refinancing and interest rate risks.

Notes & Additional Commentary

FY2024 results include a one-time gain from asset disposals and favorable currency translation effects. The company’s recent stock split increased shares outstanding but did not dilute shareholder value. Unusual items such as legal settlements related to opioid litigation are disclosed but did not materially affect the core earnings. The company’s strategic investments in technology and new store formats aim to sustain long-term competitive advantages.

Investment Implications

Walmart’s robust revenue growth, strong cash flow, and disciplined capital allocation position it well for near-term stability and dividend growth. The ongoing digital transformation and international expansion provide long-term growth avenues, though macroeconomic risks remain. Investors should consider Walmart’s resilient business model and focus on operational efficiency as key drivers of future performance. Caution is advised regarding potential regulatory and geopolitical uncertainties that could impact valuation multiples.