Walmart Inc. Form 10-K Summary: Fiscal Year Ended January 31, 2026
Business Context and Reporting Period
This filing covers the fiscal year ended January 31, 2026 ("fiscal 2026"). Walmart Inc. operates as a people-led, technology-powered omnichannel retailer with three reportable segments: Walmart U.S., Walmart International, and Sam's Club U.S. As of January 31, 2026, the Company operated approximately 10,955 retail units across 19 countries and employed approximately 2.1 million associates globally. The Company's strategy focuses on price leadership, omnichannel integration, and investments in technology, including artificial intelligence (AI), to enhance customer experience and operational efficiency.
Key Financial Metrics
| Metric | Fiscal 2026 | Fiscal 2025 |
|---|---|---|
| Total Revenues | $713.2 billion | $681.0 billion |
| Net Sales | $706.4 billion | $674.5 billion |
| Operating Income | $29.8 billion | $29.3 billion |
| Consolidated Net Income | $22.3 billion | $20.2 billion |
| Diluted EPS | $2.73 | $2.41 |
| Gross Profit Margin | 24.2% | 24.1% |
| Operating Margin | 4.2% | 4.4% |
| Free Cash Flow | $14.9 billion | $12.7 billion |
| Capital Expenditures | $26.6 billion | $23.8 billion |
| Total Debt (Short & Long Term) | $38.2 billion | $36.0 billion |
| Cash and Cash Equivalents | $10.7 billion | $9.0 billion |
Material Changes vs. Prior Period
- Revenue Growth: Total revenues increased 4.7% year-over-year, driven by a 4.7% increase in net sales. Growth was supported by strong comparable sales across U.S. segments and international markets, with eCommerce sales contributing significantly.
- Segment Performance:
- Walmart U.S.: Net sales rose 4.4% to $483.0 billion. Comparable sales increased 4.3%, driven by growth in average ticket and transactions.
- Walmart International: Net sales increased 7.0% to $130.4 billion, though operating income decreased $0.4 billion due to a $0.7 billion charge related to share-based compensation modifications at PhonePe and currency headwinds.
- Sam's Club U.S.: Net sales grew 3.1% to $93.0 billion. Comparable sales (including fuel) increased 2.9%, though fuel sales negatively impacted growth due to lower fuel prices.
- Expense Increases: Operating expenses as a percentage of net sales increased to 20.9% from 20.7%. This was primarily due to higher self-insured general liability claims ($0.9 billion), the PhonePe compensation charge ($0.7 billion), and increased depreciation from capital investments.
- Investment Gains: "Other (gains) and losses" resulted in a net gain of $2.1 billion in fiscal 2026, compared to a net loss of $0.8 billion in fiscal 2025, largely due to changes in the fair value of equity investments.
Guidance, Outlook, and Risks
- Capital Allocation: The Company projects capital expenditures for fiscal 2027 to be approximately $25 billion to $27 billion, focusing on technology, supply chain, and customer-facing initiatives.
- Shareholder Returns: In February 2026, the Board approved a new $30.0 billion share repurchase authorization. The annual dividend was increased to $0.99 per share for fiscal 2027.
- Management Commentary: Management emphasized disciplined inventory management and growth in higher-margin businesses. They noted that while the tariff environment remains dynamic, less than one-third of U.S. sales are imported.
- Risks and Contingencies:
- Legal Proceedings: The Company is involved in ongoing opioid-related litigation (MDL No. 2804) and DOJ civil litigation. A $3.3 billion liability for opioid settlements was accrued in fiscal 2023 and fully paid by January 2025. A $100 million judgment was reached regarding the Spark Driver platform, with $37 million accrued.
- Regulatory: Antitrust investigations continue in Mexico and India (Flipkart). The Company faces potential penalties related to Clean Air Act violations regarding refrigeration leaks.
- Cybersecurity: The filing highlights evolving cyber threats, including AI-enabled attacks, though no material cybersecurity incidents were reported as of the filing date.
Key Facts for Investor Verification
- PhonePe Impact: Verify the long-term impact of the $0.7 billion non-cash charge related to PhonePe share-based compensation modifications and the reduction in ownership stake from 84% to 73%.
- Liability Claims: Monitor the trajectory of self-insured general liability claims, which increased expenses by approximately $0.9 billion in fiscal 2026.
- Tariff Exposure: Assess the Company's ability to absorb or pass on costs given the dynamic tariff environment, noting that less than one-third of U.S. sales are imported.
- Capital Expenditure Efficiency: Track the return on the increased capital expenditures ($26.6 billion) focused on automation and omnichannel capabilities.
- Legal Resolutions: Watch for updates on the DOJ Opioid Civil Litigation trial scheduled for November 2027 and the outcome of the Mexico antitrust appeal.