Why did WMT's Q3 2025 earnings exceed forecasts?

**Walmart's Q3 2025 earnings exceeded forecasts due to strong revenue growth and improved profitability in its core business segments.** Here's a detailed analysis:

1. **Robust Revenue Growth**: Walmart's consolidated revenue increased by 5.5% year-over-year, reaching $169.6 billion. This growth was driven by a 6.2% increase in revenue when considering constant currency adjustments. The company's strong revenue performance was a result of continued growth in its e-commerce sales and marketplace business, which saw a 27% increase. In addition, Walmart's advertising business grew by 28%, with a 26% increase in Walmart Connect in the U.S..
2. **Increased Gross Margin and Operating Income**: The company's gross margin rate improved by 21 basis points, primarily due to Walmart U.S.'s performance. This improvement in gross margins, combined with higher membership income and reduced losses in eCommerce, contributed to an 8.2% increase in operating income. When considering constant currency adjustments, this growth was even more pronounced, reaching 9.8%.
3. **Effective Cost Management**: Despite higher costs of sales and operating, selling, general, and administrative expenses, Walmart managed to deliver solid profitability results. The company attributed this to effective cost management and strategic initiatives aimed at enhancing operational efficiency.

In summary, Walmart's Q3 2025 earnings exceeded forecasts due to strong revenue growth, particularly in e-commerce and advertising, improved gross margins and operating income, and effective cost management. These factors combined to deliver robust financial performance, surpassing market expectations.