Walmart Inc. (WMT): history, ownership, mission, how it works & makes money

A Brief History of Walmart Inc.

Overview

Walmart Inc., founded in 1962 by Sam Walton, has grown to become one of the largest retail corporations globally, operating a chain of hypermarkets, discount department stores, and grocery stores. As of 2024, Walmart continues to dominate the retail market with a strong presence in both the U.S. and international markets.

Financial Performance

For the second quarter ended July 31, 2024, Walmart reported total revenues of $169.3 billion, reflecting a 4.8% increase compared to the same period in 2023. Net sales were $167.8 billion, up from $160.3 billion a year earlier. Consolidated net income for the same period was $4.7 billion, down from $8.1 billion in the prior year, primarily due to increased expenses and other losses.

Operational Highlights

As of July 31, 2024, Walmart operated 10,619 stores worldwide and maintained retail square footage of approximately 1.049 billion square feet. The company reported a gross profit margin of 24.4% for the second quarter of 2024, an increase from 24.0% in the same quarter of 2023.

Dividends and Share Repurchases

Walmart declared a fiscal 2025 annual dividend of $0.83 per share, an increase from $0.76 per share in the previous fiscal year. The company repurchased 33.3 million shares at an average price of $62.15 during the first half of 2024, with a remaining authorization of $14.5 billion for future repurchases.

Market Presence and E-Commerce Growth

Walmart's U.S. segment reported comparable sales growth of 4.2% for the second quarter of 2024, driven largely by strong performance in grocery and health and wellness categories. E-commerce sales contributed significantly, with approximately $18.9 billion in sales for Q2 2024, up from $15.5 billion in Q2 2023.

International Operations

Walmart's international operations generated $29.6 billion in net sales for Q2 2024, with notable growth in Mexico, Canada, and China. The company continues to invest in expanding its international footprint and enhancing its e-commerce capabilities across various markets.

Conclusion

Walmart's strategic focus on e-commerce, strong operational performance, and effective cost management have positioned the company well for continued growth in the competitive retail landscape.

A Who Owns Walmart Inc. (WMT)

Major Shareholders

As of 2024, Walmart Inc. (WMT) has a diverse ownership structure comprising institutional investors, individual shareholders, and company insiders. The largest shareholders include:

Walmart Family Ownership

The Walton family remains the largest shareholder group of Walmart, holding approximately 48% of the total shares. This includes notable individuals such as:

• Rob Walton: Former Chairman, with significant personal holdings.
• Jim Walton: Active in Walmart's operations, also holds substantial shares.
• Alice Walton: Known for her philanthropic efforts, holds shares in Walmart.

Institutional Ownership Trends

Institutional investors have shown consistent interest in Walmart, reflecting confidence in the company's stability and growth prospects. As of 2024:

• Vanguard Group holds approximately 8.3% of Walmart's total shares.
• BlackRock's holdings account for about 7.8%.
• State Street Corporation maintains 4.9% of the company's shares.

Insider Ownership

Insider ownership is also significant, particularly among the Walton family. This ownership structure influences company decisions and policies, ensuring alignment with long-term strategic goals. The total insider ownership is estimated at approximately 48% of shares.

Stock Performance and Dividend History

As of July 31, 2024, Walmart's stock was trading at approximately $62.15 per share, with a year-to-date return of around 10%. The company has a history of consistent dividend payments, with an annual dividend of $0.83 per share approved for fiscal 2025.

Conclusion on Ownership Structure

The ownership structure of Walmart Inc. is characterized by a strong foundation of institutional investors and significant family ownership. This combination provides stability and a forward-looking approach to the company's strategic initiatives.

Walmart Inc. (WMT) Mission Statement

Mission Statement Details

The mission statement of Walmart Inc. emphasizes the company's commitment to saving people money so they can live better. This mission drives the company's operations and strategic initiatives across its various segments, including Walmart U.S., Walmart International, and Sam's Club.

Financial Performance Overview

As of July 31, 2024, Walmart reported consolidated net income of $4.7 billion, a decrease from $8.1 billion in the same period the previous year. The diluted net income per common share attributable to Walmart was $0.56, down from $0.98 in the prior year.

Segment Performance

The following table summarizes the net sales and operating income for Walmart's segments for the three and six months ended July 31, 2024:

Growth and Market Trends

Walmart's total revenues increased by $7.7 billion or 4.8% for the three months ended July 31, 2024, compared to the prior year. This growth is largely attributed to strong performance in eCommerce and grocery segments.

Comparable Sales Performance

Comparable sales in the U.S. increased by 4.3% for the three months ended July 31, 2024. This growth was driven by strong sales in grocery and health and wellness categories, with eCommerce contributing approximately 2.9% to this growth.

Cost Management and Efficiency

The gross profit margin for Walmart was reported at 24.4% for the three months ended July 31, 2024, an increase from 24.0% in the previous year. Operating expenses as a percentage of net sales increased, indicating a focus on managing costs amid rising operational demands.

Shareholder Returns

Walmart declared a fiscal 2025 annual dividend of $0.83 per share, an increase from the previous year's $0.76 per share. The dividend is to be paid in quarterly installments, reflecting Walmart's commitment to returning value to shareholders.

Balance Sheet Highlights

As of July 31, 2024, Walmart's total assets were valued at $254.4 billion, with total liabilities of $163.8 billion. The company's equity stood at $90.6 billion.

Liquidity Position

Walmart reported cash and cash equivalents of $8.8 billion as of July 31, 2024. The company maintains a working capital deficit of $18.8 billion, which is consistent with its operational strategy of efficient cash utilization.

How Walmart Inc. (WMT) Works

Business Model

Walmart Inc. operates on a low-cost retail model, focusing on offering a wide range of products at competitive prices. The company utilizes economies of scale to reduce costs and pass savings onto customers.

Financial Performance

As of July 31, 2024, Walmart reported total revenues of $330.843 billion, reflecting a 5.4% increase compared to the previous fiscal year. This growth was driven by strong comparable sales and an increase in eCommerce transactions.

Segment Performance

Walmart's operations are divided into three primary segments: Walmart U.S., Walmart International, and Sam's Club.

Walmart U.S.

The U.S. segment reported net sales of $224.017 billion for the six months ended July 31, 2024, an increase of 4.3% year-over-year.

Walmart International

The international segment achieved net sales of $59.400 billion for the six months ended July 31, 2024, reflecting a 9.6% increase.

Sam's Club

Sam's Club reported net sales of $44.288 billion for the six months ended July 31, 2024, an increase of 4.6% year-over-year.

eCommerce Performance

Walmart's eCommerce sales are a significant growth driver, contributing approximately $18.9 billion for the three months ended July 31, 2024.

Operational Metrics

As of July 31, 2024, Walmart operated 10,619 stores with a total retail square footage of 1,049 million square feet.

Liquidity and Cash Flow

Walmart reported net cash provided by operating activities of $16.357 billion for the six months ended July 31, 2024.

Debt and Shareholder Returns

As of July 31, 2024, Walmart's total long-term debt was $36.859 billion, with a working capital deficit of $18.8 billion.

Dividends

The annual dividend for fiscal 2025 was approved at $0.83 per share, an increase from the previous year's $0.76 per share.

How Walmart Inc. (WMT) Makes Money

Revenue Streams

Walmart generates revenue primarily through three segments: Walmart U.S., Walmart International, and Sam's Club. For the six months ended July 31, 2024, the total revenues were $330.843 billion, an increase of 5.4% compared to the previous year.

Walmart U.S. Segment

The U.S. division is the largest contributor to Walmart's revenue. For the six months ended July 31, 2024, Walmart U.S. reported net sales of $224.017 billion. This segment is characterized by strong sales in grocery, health and wellness, and general merchandise.

eCommerce sales for Walmart U.S. contributed approximately $36.5 billion for the six months ended July 31, 2024, reflecting a significant growth from the previous year.

Walmart International Segment

Walmart International operates in various countries, contributing $59.400 billion in net sales for the six months ended July 31, 2024, representing a 9.6% increase year-over-year. The growth was primarily driven by strong performance in Mexico, Central America, Canada, and China.

Sam's Club Segment

The Sam's Club division reported net sales of $44.288 billion for the six months ended July 31, 2024, with a comparable sales increase of 4.6%. The growth was supported by strong sales in grocery and consumables.

Operating Income and Profitability

Walmart's operating income for the six months ended July 31, 2024, was $14.781 billion, reflecting a 9.0% increase from the previous year. The operating income as a percentage of net sales improved to 4.5%.

Membership and Other Income

Membership income, primarily from Sam's Club, saw significant growth, contributing $3.138 billion for the six months ended July 31, 2024, an increase of 18.5% year-over-year.

Conclusion

Walmart's diverse revenue streams from its U.S. and international operations, alongside the strong performance of Sam's Club, contribute significantly to its overall financial success. The company's focus on eCommerce, grocery sales, and membership growth are key drivers of its profitability.