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Walmart reported $665 billion in revenue over the past twelve months, nearing three-quarters of a trillion dollars. The retail giant's profit for the same period was $15 billion, resulting in a profit margin of 2.6%, which is considered razor thin for the industry. In its most recent quarter, Walmart's gross margin was 25.1%, slightly up from 24.9% in the same quarter of 2019. The company's financial performance reflects a complex pricing environment, particularly in the grocery sector, where high gross margins for individual items exist despite low net margins overall. Additionally, Walmart is seeing a shift towards higher-margin advertising as a faster-growing segment of its business, which could influence its profit and loss composition in the future.
Large supermarket chains don't have high net margins right now but they have high gross margins for individual items and some stores have higher margins than other stores. Pricing is complex, price gouging is complex. Just because it's not obvious doesn't mean it isn't happening.
"Advertising margins typically range in the 70% to 80% range, I think for a lot of companies. And so, this is the faster growing part of our business with a higher margin, which changes the composition of our P&L over time." $WMT https://t.co/xmzKKHSiJI
Gross margin packs in ton of stuff including distribution centre costs etc & definition hugely varies across companies. It is NOT pure merchandise margin. Plus $WMT has seen high margin discretionary items fall sharply, so even on this blunt definition, u/l margin up more. https://t.co/7lFICh7bTH