How Does Walmart Make its Money?
Walmart is the world’s largest company by revenue and the largest private employer, with approximately 2.1 million associates worldwide. The company operates a chain of hypermarkets, discount department stores, and grocery stores across 19 countries. Walmart also runs a rapidly growing e-commerce business and a membership warehouse club (Sam’s Club).
Walmart’s scale gives it enormous purchasing power, allowing it to negotiate the lowest prices from suppliers and pass those savings to consumers through its “Everyday Low Price” strategy. The company operates ~10,500 stores globally and fulfills e-commerce orders from both dedicated fulfillment centers and stores.
Revenue Breakdown
| Segment | FY2025 (Jan) | FY2024 (Jan) | YoY Growth |
|---|---|---|---|
| Walmart U.S. | $462.5B | $441.8B | +4.7% |
| Walmart International | $131.2B | $114.6B | +14.5% |
| Sam’s Club | $86.2B | $84.3B | +2.3% |
| Total Revenue | $674.5B | $648.1B | +4.1% |
Walmart U.S. — 69% of Revenue
The core domestic business with ~4,700 stores. Revenue grew through a combination of comparable store sales increases (driven by grocery inflation and market share gains), e-commerce growth of 22%, and store pickup/delivery expansion. Walmart has become the #1 grocer in America by market share. The advertising business (Walmart Connect) grew 24% and is becoming an increasingly high-margin revenue contributor.
Walmart International — 19% of Revenue
Operations across 18 countries including Mexico (Walmex), Canada, China, India (Flipkart), Chile, and others. This segment posted the strongest growth at 14.5%, boosted by Flipkart’s continued expansion in India and Walmex’s market share gains in Mexico. The company has been restructuring its international portfolio, exiting less profitable markets while doubling down on high-growth markets.
Sam’s Club — 13% of Revenue
Membership warehouse club competing directly with Costco. Revenue grew modestly, though membership income hit record highs. Sam’s Club has been investing heavily in technology, including an app-based scan-and-go checkout system. The segment operates ~600 locations in the U.S.
Income Statement Overview
| Metric | FY2025 | FY2024 |
|---|---|---|
| Total Revenue | $674.5B | $648.1B |
| Cost of Sales | $510.1B | $490.1B |
| Gross Profit | $164.4B | $158.0B |
| Operating Expenses | $137.0B | $132.0B |
| Operating Income | $27.4B | $26.0B |
| Net Income | $16.3B | $15.5B |
Key Financial Metrics
- Gross Margin: 24.4% — Razor-thin compared to most retailers, reflecting Walmart’s relentless low-price strategy. This is essentially the cost of being the price leader.
- Operating Margin: 4.1% — Typical for mass-market retail. Walmart makes up for thin margins with staggering volume — it processes roughly 240 million customer transactions per week globally.
- Revenue Growth: +4.1% — Steady at this scale. Growing a $674B revenue base by 4% means adding roughly $26 billion in a single year — more than the total revenue of most Fortune 500 companies.
- E-commerce Growth: +22% — Walmart’s online business including grocery pickup, delivery, and marketplace is accelerating and becoming a significant profit driver through advertising and fulfillment services.
What to Watch
- Advertising and marketplace — Walmart Connect (advertising) and third-party marketplace are high-margin businesses growing rapidly. If they scale to Amazon-like levels relative to revenue, they could meaningfully boost Walmart’s profit margins.
- Automation and fulfillment — Walmart is investing billions in automated fulfillment centers and last-mile delivery. These investments compress margins now but should pay off in lower costs per order over time.
- Flipkart and India — Walmart’s $16B bet on Flipkart is one of the largest investments in India’s e-commerce market. A Flipkart IPO remains a potential catalyst for unlocking value.
- Membership and Walmart+ — Walmart+ is the company’s answer to Amazon Prime. Growing this subscription base creates sticky, recurring revenue and increases customer lifetime value.
- Grocery market share — Walmart continues to gain grocery share from traditional supermarkets, particularly among higher-income households trading down in search of value.