Financial Performance Highlights
- Significant Profit Growth: The company’s net income attributable to Walmart saw a substantial increase this quarter. Diluted earnings per share (EPS) reached $0.77, a 35% increase compared to $0.57 in the same period last year.
- Year-to-Date (YTD) Performance: For the first nine months of fiscal year 2026, both revenue and profit have outperformed the same period in fiscal 2024, demonstrating strong consumer demand despite ongoing inflationary pressures.
- Share Metrics: As of October 31, 2025, the weighted-average diluted common shares outstanding were 8.01 billion, a decrease from the prior year, reflecting the impact of the company’s ongoing share repurchase program.
Segment Performance
- Walmart U.S.: Continues to be the primary revenue driver, benefiting significantly from e-commerce growth and the increasing popularity of in-store pickup services.
- Walmart International: While impacted by currency fluctuations (foreign exchange translation losses), it maintained strong growth momentum in key markets like Mexico and China.
- Sam’s Club: Membership income showed steady growth, indicating higher member loyalty and retention.
Debt and Capital Structure
- Debt Issuance: The company actively managed its debt during the period, issuing several tranches of Senior Unsecured Notes with maturities in 2027, 2029, 2030, and 2035. Interest rates for these notes range from 1.050% to 5.750%.
- Credit Facilities: Walmart maintains substantial liquidity, including its $15 billion five-year credit facility updated in April 2025 to ensure robust financial flexibility.
Key Legal and Risk Matters
- Legal Settlements: The company continues to process settlements related to opioid litigation. Additionally, the antitrust investigation in Mexico and the Equal Value (pay equity) claims at Asda in the UK remain potential financial risks.
- Market Risks: The report highlights the impact of interest rate volatility and foreign exchange fluctuations on global operations, specifically noting movements in the Mexican Peso (MXN).
Future Outlook and Controls
- Systems Modernization: Walmart is undergoing a global upgrade of its financial systems, introducing automation into manual processes to improve the efficiency and accuracy of financial reporting.
- Dividends and Buybacks: The company remains committed to its shareholder return policy, maintaining stable dividend payments and returning capital through share repurchases.
Based on Walmart’s 10-Q filing for the third quarter of fiscal year 2026 (ended October 31, 2025), here is the consolidated income statement and segment performance analysis.
Consolidated Statement of Income
(Amounts in millions, except per share data and percentages)
| Item | Q3 FY26 (Current) | Q3 FY25 (Prior Year) | YoY Change | % of Total Rev |
| Net sales | 177,769 | 168,003 | +5.8% | 99.0% |
| Membership and other income | 1,727 | 1,585 | +9.0% | 1.0% |
| Total revenues | 179,496 | 169,588 | +5.8% | 100.0% |
| Cost of sales | 134,706 | 127,340 | +5.8% | 75.0% |
| Operating, selling, general and admin (SG&A) | 38,094 | 35,540 | +7.2% | 21.2% |
| Operating income | 6,696 | 6,708 | -0.2% | 3.7% |
| Interest expense, net | 591 | 478 | +23.6% | 0.3% |
| Other gains and (losses), net | (2,081) | 132 | NM | -1.2% |
| Provision for income taxes | 2,098 | 1,384 | +51.6% | 1.2% |
| Net income attributable to Walmart | 6,143 | 4,577 | +34.2% | 3.4% |
| Diluted EPS | 0.77 | 0.57 | +35.1% | — |
Net Sales by Segment
(Amounts in billions)
| Segment | Q3 FY26 | Q3 FY25 | YoY Change | % of Total Sales |
| Walmart U.S. | 120.7 | 114.9 | +5.1% | 67.9% |
| Walmart International | 33.5 | 30.3 | +10.8% | 18.8% |
| Sam’s Club | 23.6 | 22.9 | +3.1% | 13.3% |
| Total Net Sales | 177.8 | 168.1 | +5.8% | 100.0% |
Key Financial Insights
- Revenue Growth: Total revenue increased by 5.8% YoY, driven by strong performance in the U.S. and significant growth in International markets.
- E-commerce Momentum: Global e-commerce sales grew by 27%, continuing to be a major tailwind for the company.
- Margin Analysis: While gross margins remained relatively stable, SG&A expenses grew slightly faster than revenue (7.2% vs 5.8%) due to continued investments in technology and store modernization.
- Net Income Variance: The 34.2% increase in net income is significantly impacted by “Other gains and losses,” which includes unrealized gains/losses on equity investments.
- International Strength: Despite currency headwinds, the International segment showed the strongest growth at 10.8%, led by Walmex and Flipkart.
Based on Walmart’s 10-Q filing for the period ended October 31, 2025, here is the condensed Consolidated Balance Sheet with percentage of total assets and year-to-date (YTD) changes.
Consolidated Balance Sheets
(Amounts in millions, except percentages)
| Assets | Oct 31, 2025 | Jan 31, 2025 | YTD Change | % of Total Assets |
| Cash and cash equivalents | 10,131 | 9,859 | +2.8% | 3.8% |
| Receivables, net | 9,158 | 8,973 | +2.1% | 3.5% |
| Inventories | 60,115 | 54,892 | +9.5% | 22.7% |
| Other current assets | 3,115 | 2,752 | +13.2% | 1.2% |
| Total current assets | 82,519 | 76,476 | +7.9% | 31.2% |
| Property and equipment, net | 98,715 | 96,133 | +2.7% | 37.3% |
| Operating lease right-of-use assets | 18,912 | 18,521 | +2.1% | 7.1% |
| Goodwill | 31,525 | 31,142 | +1.2% | 11.9% |
| Other long-term assets | 32,842 | 30,135 | +9.0% | 12.5% |
| Total assets | 264,513 | 252,407 | +4.8% | 100.0% |
| Liabilities and Equity | Oct 31, 2025 | Jan 31, 2025 | YTD Change | % of Total Assets |
| Current liabilities | 101,235 | 94,151 | +7.5% | 38.3% |
| Long-term debt | 39,525 | 36,451 | +8.4% | 14.9% |
| Long-term lease obligations | 16,812 | 16,523 | +1.7% | 6.4% |
| Other long-term liabilities | 12,145 | 11,852 | +2.5% | 4.6% |
| Total liabilities | 169,717 | 158,977 | +6.8% | 64.2% |
| Total equity | 94,796 | 93,430 | +1.5% | 35.8% |
| Total liabilities and equity | 264,513 | 252,407 | +4.8% | 100.0% |
Key Balance Sheet Observations
- Inventory Management: Inventories increased by 9.5% (approx. 5.2 billion) compared to the fiscal year-end in January. This is a typical seasonal increase as the company builds stock for the holiday shopping season.
- Asset Composition: Property and equipment remains the largest asset category at 37.3%, reflecting Walmart’s heavy investment in physical infrastructure and supply chain automation.
- Debt Profile: Long-term debt rose by 8.4%, primarily due to the issuance of new senior unsecured notes during the year to manage liquidity and fund operations.
- Liquidity Ratio: The company continues to operate with a working capital deficit (Current Liabilities exceed Current Assets), which is common for large retailers with high inventory turnover and strong cash-generating capabilities.
Based on the financial data from the 10-Q filing (as of October 31, 2025), here is the breakdown of Walmart’s debt issuance and its proportion relative to total assets:
Debt as a Percentage of Total Assets
(Amounts in millions)
| Category | Amount (Oct 31, 2025) | % of Total Assets |
| Short-term borrowings | 8,401 | 3.2% |
| Long-term debt due within one year | 3,523 | 1.3% |
| Long-term debt | 34,445 | 13.0% |
| Total Debt (Excl. Leases) | 46,369 | 17.5% |
| Total Assets | 264,513 | 100.0% |
Why Walmart Issues These Bonds (Senior Unsecured Notes)
- Refinancing and Liquidity Management:Walmart frequently issues new notes to pay off maturing debt. This allows the company to maintain a stable capital structure and extend debt maturities. For example, during the current fiscal year, they issued notes maturing in 2027, 2030, and 2035 to manage long-term liquidity.
- Capital Expenditures (CapEx):The company is heavily investing in supply chain automation, store remodels (the “Store to the Future” initiative), and e-commerce technology. Issuing long-term bonds provides a predictable cost of capital for these multi-year projects.
- Shareholder Returns:Walmart uses its strong credit rating to access low-cost debt, which can be used to fund share repurchases and dividend payments. This is a common strategy to optimize the weighted average cost of capital (WACC).
- Seasonal Working Capital:While short-term borrowings (commercial paper) handle immediate needs, long-term bond issuance ensures that the company has a “permanent” base of capital to support the $60.1 billion in inventory required for the holiday peak season.
Summary of Debt Structure
The total long-term debt (including the portion due within one year) represents approximately 14.3% of total assets. When including short-term borrowings, the total debt load is 17.5%. This is considered a conservative and healthy level of leverage for a company with Walmart’s massive cash-generating power.
Based on Walmart’s 10-Q filing for the third quarter of fiscal year 2026 (ended October 31, 2025) and recent court rulings, here is a detailed summary of the primary legal issues:
1. Opioids Litigation
This remains one of Walmart’s most significant historical legal challenges.
- National Settlement: In late 2022, Walmart agreed to a $3.1 billion nationwide settlement framework to resolve claims from state, local, and tribal governments regarding its pharmacy dispensing practices.
- Securities Fraud Win (August 2025): In a major victory for the company, the U.S. Court of Appeals for the Third Circuit affirmed the dismissal of a shareholder class action. Investors had claimed Walmart misled them by not disclosing a DOJ investigation into its opioid practices earlier. The court ruled that Walmart’s disclosures were sufficient and not misleading.
- Ongoing Civil Litigation: While the massive settlement is in place, certain civil litigation—including a lawsuit by the U.S. Department of Justice (DOJ)—is still active. The trial for the DOJ civil case is currently scheduled for November 2027.
2. Mexico Antitrust Matter (Walmex)
Walmart’s Mexican subsidiary, Walmex, is embroiled in a dispute with Mexico’s antitrust regulator, COFECE.
- The Allegations: Following a multi-year investigation, COFECE alleged that Walmex engaged in “monopolistic practices” by leveraging its market power to impose unfair prices and conditions on its suppliers.
- The Ruling (Late 2024): COFECE imposed a fine of approximately 93 million pesos (approx. $5 million). While the monetary fine is small relative to total revenue, the ruling imposes restrictions on how Walmex negotiates certain supplier contributions.
- Current Status: Walmex is vigorously challenging the decision in court, citing “irregularities” in the investigation process. The company maintains that its practices benefit Mexican families by keeping prices low.
3. Asda Equal Value Claims (UK)
Although Walmart sold the majority of its stake in the UK supermarket chain Asda in 2021, it remains liable for certain pre-sale legal claims through an indemnification agreement.
- The Dispute: Over 60,000 shop floor workers (predominantly women) argue they should be paid the same as warehouse workers (predominantly men), claiming their roles are of “equal value.”
- Critical Ruling (February 2025): An Employment Tribunal ruled that 12 out of 14 categories of store jobs were indeed of “equal value” to distribution center jobs. This means the workers have won the first two stages of the legal battle.
- Potential Liability: The case now moves to the final stage, where Asda must prove there is a non-discriminatory reason for the pay gap. If successful, claimants estimate the total payout could reach £1.2 billion (approx. $1.5 billion).
4. Financial Impact Summary
- Legal Reserves: Walmart maintains an “Accrued Liabilities” account for probable and estimable losses. As of October 31, 2025, the company settled certain legal matters which resulted in a minor adjustment to its Q3 earnings.
- Risk Disclosure: The 10-Q emphasizes that due to the inherent uncertainty of litigation, it is often impossible to estimate the “reasonably possible” loss for cases that haven’t reached a final settlement or judgment.
In the latest 10-Q filing (October 31, 2025), Walmart’s financial reserves and legal standing regarding the opioid crisis show that the company has transitioned from high-stakes litigation to the execution of multi-year settlement payments.
1. Financial Reserves for Legal Matters
Walmart does not always disclose a single “opioid-only” line item for reserves in every quarterly report, but it accounts for these under Accrued Liabilities (current) and Deferred Income Taxes and Other (long-term).
- Accrued Liabilities (Current): As of October 31, 2025, this stood at $31,521 million. This includes the portions of legal settlements (including opioids) due within the next 12 months.
- Total Settlement Impact: The primary nationwide settlement framework finalized in late 2022 totaled $3.1 billion.
- Shareholder Derivative Settlement: In October 2024, Walmart settled a major “duty of oversight” lawsuit filed by shareholders for $123 million. This was one of the largest settlements of its kind, paid largely by insurance carriers to the company to resolve claims that executives failed to supervise opioid dispensing.
2. Payment Structure and Timeline
The $3.1 billion settlement is not paid all at once but is distributed to states, local governments, and tribes over several years to fund “opioid abatement” (treatment and prevention programs).
| Settlement Type | Total Amount | Status as of Q3 FY26 |
| Nationwide Framework | $3.1 Billion | Payments ongoing (multi-year schedule) |
| Texas Specific | $168 Million | Part of the $3.1B; being distributed to local areas |
| Shareholder Derivative | $123 Million | Settled/Finalized (paid by insurers) |
3. Current Legal Outlook (2025–2026)
While the $3.1 billion settlement resolved the vast majority of claims from government entities, Walmart still faces a few remaining legal “tails”:
- DOJ Civil Suit: The U.S. Department of Justice’s civil case against Walmart is still active. As of the latest updates, the trial is not expected until November 2027. This represents a potential future liability that is not yet fully settled.
- Operational Requirements: As part of the settlements, Walmart has implemented strict “Compliance and Governance” reforms. This includes sophisticated monitoring systems to detect “red flag” prescriptions and increased authority for pharmacists to refuse suspicious orders.
4. Recent Legal Victory
A significant win for Walmart occurred in August 2025, when a federal appeals court dismissed a class-action securities fraud lawsuit. Shareholders had alleged Walmart hid the severity of the opioid investigations, but the court ruled Walmart’s disclosures were legally adequate, sparing the company from further massive damages in that specific case.
Summary: Walmart has largely “de-risked” the opioid crisis by securing a $3.1 billion settlement. The focus now is on managing the cash outflows according to the agreed schedule and maintaining the upgraded compliance protocols to prevent future regulatory issues.