Walmart Inc. (WMT) is a global retail giant that focuses on providing a wide variety of products at competitive prices to a massive customer base, both in physical stores and online.

Here's a breakdown of how Walmart makes its money and the key financial measures to watch:

1. The Business Model (How They Make Money)

Walmart's core business is selling everyday goods to millions of customers worldwide. They operate a vast network of stores, including large "Supercenters" that offer everything from groceries to electronics, smaller "Neighborhood Markets," and membership-only warehouse clubs under the "Sam's Club" brand. Their strategy revolves around offering low prices, which drives high sales volumes. To achieve these low prices, Walmart relies on an incredibly efficient supply chain and its enormous size, allowing them to buy products in bulk and negotiate favorable deals with suppliers.

In recent years, Walmart has significantly expanded its online presence, building a strong e-commerce business that complements its physical stores. This "omnichannel" approach means customers can shop however they prefer – in person, online for delivery, or by ordering online and picking up at a store. They are also growing other services like digital advertising and third-party seller platforms.

Walmart's business is divided into three main parts:

• Walmart U.S.: This is their largest segment, primarily serving customers in the United States through Walmart and Walmart Neighborhood Market stores, as well as walmart.com. In fiscal year 2026, this segment generated $483.0 billion in net sales, accounting for 68% of the company's total consolidated net sales.
• Walmart International: This segment includes their operations outside the U.S., offering various retail formats and e-commerce platforms in 18 other countries. For fiscal year 2026, Walmart International contributed $130.4 billion in net sales, or 19% of the total.
• Sam's Club U.S.: This is a membership-only warehouse club chain operating in the U.S. and Puerto Rico, along with samsclub.com. In fiscal year 2026, Sam's Club U.S. generated $93.0 billion in net sales, representing 13% of Walmart's consolidated net sales.

Overall, Walmart's global e-commerce sales reached $150.4 billion in fiscal year 2026, showing a 24% increase from the previous year and making up 23% of the company's total net sales.

2. The Metrics That Matter Most

For a company like Walmart, which focuses on high sales volume and efficient operations, here are the most important financial metrics to keep an eye on:

• Revenue: This number tells you the total amount of money Walmart brings in from selling goods and services before any expenses are taken out. For a retailer, consistently growing revenue shows that more customers are buying their products, which is the lifeblood of their business. In fiscal year 2026, Walmart's total revenue was $713.2 billion, up from $681.0 billion in fiscal year 2025.
• Operating Income: This metric shows how much profit Walmart makes from its core business operations after covering the direct costs of goods sold and other operating expenses like salaries, rent, and marketing, but before accounting for interest and taxes. It's a good indicator of how efficiently the company is running its day-to-day retail business. For fiscal year 2026, Walmart reported an adjusted operating income of $31.0 billion, compared to $29.3 billion in fiscal year 2025.
• Free Cash Flow (FCF): Think of Free Cash Flow as the leftover cash a company has after paying for its day-to-day operations and all the investments it needs to grow, like building new stores or upgrading technology. This cash can then be used for things like paying dividends to shareholders, buying back its own stock, or reducing debt. A healthy and growing Free Cash Flow indicates a strong, self-sustaining business. Walmart's Free Cash Flow was $14.9 billion in fiscal year 2026, an increase from $12.7 billion in fiscal year 2025.
• Capital Expenditures (CapEx): This metric represents the money Walmart spends on buying, maintaining, or upgrading its physical assets, such as stores, warehouses, equipment, and technology. For a large retailer, CapEx is crucial because it shows how much the company is investing in its future growth and efficiency, like building new Supercenters or improving its supply chain and e-commerce infrastructure. In fiscal year 2026, Walmart's Capital Expenditures were $26.642 billion, up from $23.783 billion in fiscal year 2025.

3. How to Value This Company

For a large, established, and consistently profitable company like Walmart, the P/E Ratio (Price-to-Earnings Ratio) is often the most relevant valuation metric.

The P/E Ratio helps you understand if a stock's price is high or low compared to the profits the company is making. You calculate it by taking the current stock price and dividing it by the company's earnings per share (EPS).

Here's why it's useful for Walmart:

• Simplicity: It's straightforward to understand: a lower P/E ratio generally suggests you're paying less for each dollar of earnings, which could mean the stock is "cheaper."
• Profitability Focus: Walmart is a mature business that consistently generates profits. The P/E ratio directly reflects how the market values those profits.
• Comparison: You can compare Walmart's P/E ratio to its own historical P/E ratios or to the P/E ratios of similar large, stable retailers to see if it's currently trading at a premium or a discount.

For example, as of May 21, 2026, Walmart had a trailing P/E Ratio of 39.21 based on its trailing earnings per share of $2.85. If this number is higher than its historical average or its competitors, it might suggest the stock is relatively expensive, and vice-versa. It helps everyday investors gauge market sentiment and value the company based on its ability to generate earnings.