Note: Walmart's FY'25 ended on January 31, 2025.
Trade remains a major wild card for the company — and the retail industry — as companies debate how much inventory to order and place bets about where tariff levels will ultimately land. About a third of what Walmart sells in the U.S. comes from other parts of the world, with China, Mexico, Canada, Vietnam, and India representing its largest markets for imports. Tariffs on China, in particular, create the greatest cost pressure. Chinese imports account for a high volume in categories such as toys and electronics.
Below are key drivers of Walmart's value that present opportunities for upside or downside to the current Trefis price estimate for Walmart:
For additional details, select a driver above or select a division from the interactive Trefis split for Walmart at the top of the page.
Walmart is the largest retailer in the world with nearly $680 billion in annual revenues and around 10,750 stores worldwide. The company sells goods across almost all merchandise categories including groceries, electronics, appliances, apparel, sporting goods, home furnishing products, and drugs, while strictly adhering to its EDLP (everyday low price) strategy. However, it earns around half of its revenues from groceries.
Walmart operates in three business segments: U.S., International, and Sam's Club. Walmart's U.S. segment is the largest segment of its business, accounting for approximately 70% of its revenues. Sam's Club is the retailer's warehouse model where it charges its customers an annual membership fee, allowing them to buy products at heavy discounts.
The company's most valuable segment is the U.S. segment. Walmart has built a trusted brand with a clear value proposition and expanded across the U.S., resulting in it becoming the nation's largest retailer.
Although Walmart has fewer stores in the U.S. compared to international markets, an average U.S. store is about 3 times as big as the international store in terms of retail square footage. As of fiscal 2025, the square footage per store for Walmart U.S. was 151,600 while that for Walmart International was 49,300. Revenue per square foot for Walmart's U.S. stores in FY 2025 was higher at $662 versus $451 for Walmart's International stores. Thus, despite being fewer in store count, the U.S. segment is more valuable to the company compared to its international segment.
Like any retailer, Walmart's long-term sales and income growth depend largely on the company's ability to open new stores and expand into new markets. However, due to Walmart's size, it runs the risk of cannibalizing its own sales figures in the U.S., thereby effectively competing with itself for market share. This is the reason why Walmart has slowed down its Supercenter expansion in the U.S.
Opening more Supercenters and large format stores may be difficult for Walmart due to its massive presence in the U.S. The company is, therefore, focusing efforts on increasing its store productivity. To achieve this, the retailer has been remodeling its stores and converting its discount stores into supercenters. While Walmart's discount stores offer a wide assortment of general merchandise and a limited variety of food products, its supercenters offer a full-line supermarket and general merchandise.
Walmart's executives have indicated that the retailer's future stores will occupy 8% less space, cost 16% less, and will run more efficiently. The retailer's smaller stores, called Neighborhood market stores, are one-tenth the size of a typical Walmart Supercenter and offer 15,000 items in comparison to 100,000 offered at a Supercenter. Although the size is much smaller, Neighborhood markets offer day-to-day groceries & general merchandise and are focused on attracting customers who shop regularly for their daily needs. This format can be successful in big cities, which have space constraints and where busy schedules limit many customers from driving to a supercenter.
The retailer's loyalty program Walmart+ is priced at $98/year - lower than the $139/year subscription of Amazon Prime. Like other subscription services, Walmart Plus offers its members early access to sales promotions, deals, and game-console releases, as well as fuel discounts across its partners’ gas stations. Plus, they’ve entered the grocery shopping space with fee-less home deliveries.
Walmart Plus members also get early access to Walmart’s Black Friday sales. That’s a major advantage; when discounts roll in, members get first dibs on electronics, toys, apparel, and more products before the general public — and possible out-of-stock notifications.
Walmart acquired Vizio in Feb 2024, a television maker, for $11.50 per share in cash, or around $2.3 billion in fully diluted equity value. Walmart aims to sell advertising through this deal. The acquisition of Vizio and its Smart TV operating system (SmartCast) is expected to enable Walmart to create new opportunities to help advertisers connect with customers. WMT can offer ads through SmartCast which has more than 18 million active accounts.
