WMT 10-K & 10-Q changes, risk factors and insider trading

The risks described below could, in ways we may or may not be able to accurately predict, materially and adversely affect our business, results of operations, financial position and liquidity. Our business operations could also be affected by additional factors that apply to all companies operating in the U.S. and globally. The following risk factors do not identify all risks that we may face. The disclosures below reflect our beliefs and opinions as to risk factors that could materially and adversely affect our business operations and our securities in the future. References to past events are provided by way of example only and are not intended to be a complete listing or a representation as to whether or not such risk factors have occurred in the past or their likelihood of occurring in the future.

Failure to successfully execute our omni-channelomnichannel strategy and the cost of our investments in eCommerce and technology may materially adversely affect our market position, net sales and financial performance.

Our strategy, which includes investments in eCommerce, technology, including the use of artificial intelligence ("AI") and generative AI technologies (which continues to grow and evolve within our Company),AI, talent, supply chain automation and enhancements, advertising, acquisitions, joint ventures, new store and club openings and remodels and other customer initiativesinitiatives, may not adequately or effectively allow us to continue to grow our eCommerceomnichannel business,business offerings, increase comparable sales,sales or maintain or grow our overall market position or otherwise offset the impact on the growth of our business of a moderated pace of new store and club openings and sustain the current pace of remodels.position. The success of this strategy will depend in large measure on our ability to continue building and delivering a seamless omni-channelomnichannel shopping experience and interconnected ecosystem for our customers that deepens and maintains our relationships with our customers across our various businesses and partnershipspartnerships. Customers are using digital means, including websites, captive and reinforcesthird-party digital applications, social media, and emerging agentic platforms to shop with us and our overallcompetitors enterpriseand strategy.to do comparison shopping, and we use these digital means along with digital advertising, text messages and email to interact with our customers and enhance their shopping experience.

The success of this strategy is further subject to the related risks discussed in this Item 1A. With the interconnected components of this enterprise strategy and an increasing allocation of capital expenditures focused on these initiatives, changes in customer or member perceptions about our reputation in general, or our failure to successfully execute on individual components of this strategy may adversely affect our market position, net sales and financial performance, which could also result in impairment charges to intangible assets or other long-lived assets. In addition, a greater concentration of eCommerce sales, including increasing online grocery sales,sales and the increasing role of AI-enabled platforms in product search, discovery, advertising and purchasing, could result in a reduction in the amount of traffic in our stores and clubs, which would, in turn, reduce the opportunities for cross-store or cross-club sales of merchandise that such traffic creates and could reduce our sales within our stores and clubs and materially adversely affect our financial performance.

It is difficult to predict consistently and successfully the products and services our customers will demand and changes in their shopping patterns, tastes and preferences. The success of our business depends in part on how accurately we predict consumer demand, availability of merchandise, the related impact on the demand for existing products and services and the competitive environment. Our business is dependent on our ability to make critical decisions and predictions with respect to merchandise categories that quickly respond to changing consumer spending patterns, tastes and preferences, and any incorrect calculations by us may result in lower sales, spoilage and inventory markdowns, which could adversely impact our results of operations. Our ability to predict and adapt to changing tastes and preferences depends on many factors, including obtaining accurate and relevant data on customer preferences, emphasizing relevant merchandise categories, effectively managing our inventory levels, and implementing competitive and effective pricing and promotion strategies. Price transparency, assortment of products, customer experience, convenience, ease and the speed and cost of shipping are of primary importance to customers and continue to increase in importance, particularly as a result of digital toolstools, social media, and socialemerging mediaagentic tools available to consumers and the choices available to consumers for purchasing products. In addition, to remain competitive, we must continue to develop, integrate and scale digital tools, including AI-powered search and discovery platforms and capabilities, useful interfaces and other marketing tools such as third-party recommendation engines, paid search and mobile applications. We must continue to preserve our reputation, which is impacted by public perceptions and customer experiences. It may be difficult to address negative publicity across media channels, regardless of whether it is accurate. Negative incidents, including the loss of merchandise as a result of shrink or theft, ineffective use or misuse of AI technologiestechnologies, inaccurate, biased or aotherwise data breach as a result of a cyberattack could quickly erode trust and confidence in our business and could result in consumer boycotts, workforce unrest and government investigations. These incidents may involve us, our vendors that handle our data or personal information, our workforce or others with whom we do business, including third-party service providers and independent contractors. Societal expectations, preferences, trends and political expression are ever-changing and we try to adapt, evolve and maintain a balance that meets the acceptance of our customers, members, associates, shareholders, suppliers and other stakeholders, but we may not always move as quickly or in the direction that various competing interests desire or demand, which could impact our reputation. For instance, strong opinions continue to be publicly expressed both forflawed

AI search and discovery results, or a data breach as a result of a cyberattack could quickly erode trust and confidence in our business and could result in customer dissatisfaction, consumer boycotts, workforce unrest and government investigations. These incidents may involve us, our vendors that handle our data or personal information, our workforce or others with whom we do business, including third-party service providers and independent contractors. Societal expectations, preferences, trends and political expression are ever-changing and we try to adapt, evolve and maintain a balance that meets the acceptance of our customers, members, associates, shareholders, suppliers and other stakeholders, but we may not always move as quickly or in the direction that various competing interests desire or demand, which could impact our reputation. For instance, strong opinions continue to be publicly expressed both for and against diversity,various equitysocial and inclusion and ESGenvironmental initiatives and positions taken by many corporations, including Walmart, are tracked, monitored and subject to heightened scrutiny from consumers, investors, advocacy groups and public figures, potentially leading to consumer boycotts, negative publicity campaigns, litigation and reputational harm. Negative reputational incidents or negative perceptions of us could adversely impact our business and results of operations, including through lower sales, the termination of business relationships and negative impacts to associate retention and recruiting efforts. Moreover, failure to adequately predict customer demand and consumer spending patterns or otherwise optimize and operate our distribution and fulfillment centers could result in excess or insufficient inventory, service interruptions and increased costs, any of which could significantly harm our business. As we continue to add new fulfillment centers, our fulfillment and technology networks become increasingly complex and operating them in a way that effectively meets consumer demands continues to be challenging. There can be no assurance that we will be able to operate our networks effectively.

We face strong competition from other retailers, wholesale club operators, omni-channelomnichannel retailers and other businesses which could materially adversely affect our financial performance.

Each of our segments competes for customers, employees, digital prominence, products and services and in other important aspects of its business with many other local, regional, national and global physical, eCommerce and omni-channelomnichannel retailers, social commerce platforms, wholesale club operators and retail intermediaries, and emerging agentic shopping tools and platforms, as well as companies that offer services in digital advertising, data analytics/insights, fulfillment and delivery services, health and wellness and financial services. The omni-channelomnichannel retail landscape is highly competitive and rapidly evolving, and the entry of new, well-funded competitors, or more rapid development of AI capabilities and agentic tools by these competitors to enhance productivity and the shopping experience, may increase competitive pressures. In addition, for eCommerce and other internet-based businesses, newer or smaller businesses may be better able to innovate and compete with us.

We compete in a variety of ways, including the prices at which we sell our merchandise, merchandise selection and availability, services offered to customers, location, store hours, in-store amenities, the shopping convenience and overall shopping experience we offer, the attractiveness and ease of use of our digital platforms, quality and accessibility of data for customers, suppliers, and associates, and cost, speed of and options for accurate delivery to customers of merchandise purchased through our digital platforms or through our omni-channelomnichannel integration of our physical and digital operations.

A failure to respond effectively to these competitive pressures and changes in the retail and other markets in which we operate, omni-channelomnichannel innovations and omni-channelomnichannel ecosystems developed by our competitors or delays or failure in execution of our strategy could materially adversely affect our financial performance. See "Item 1. Business" above for additional discussion of the competitive situation of eachlandscape of our reportable segments.business.

Certain segments of the retail industry are undergoing consolidation or substantially reducing operations, whether due to bankruptcy, economics or other factors. Such consolidation, or other business combinations or alliances, competitive omni-channelomnichannel ecosystems or reductions in operations may result in competitors with improved financial resources, improved access to merchandise, greater market penetration and other improvements in their competitive positions. Such business combinations or alliances could allow these companies to provide a wider variety of products and services at competitive prices, which could adversely affect our financial performance.

General economic conditions and other economic factors, globally or in one or more of the markets we serve, may adversely affect our financial performance. Higher interest rates, higher prices of petroleum products, including crude oil, natural gas, gasoline and diesel fuel, increased costs for electricity and other energy, weakness in the housing market, inflation, deflation, increased costs of essential services, such as medical care and utilities, higher levels of unemployment, decreases in GDP and consumer disposable income, unavailability of consumer credit, higher consumer debt levels, changes in consumer spending and shopping patterns, fluctuations in currency exchange rates, higher tax rates, imposition of new taxes or other changes in tax laws, changes in healthcare laws, other regulatory changes, the imposition of export and import restrictions, tariffs, trade barriers or other measures that create barriers to or increase the costs associated with international trade, overall economic slowdown or recession and other economic factors in the U.S., or in any of the other markets in which we operate, could adversely affect consumer demand for the products and services we sell in the U.S. or such other markets, change the mix of products we sell to any one or more markets with a lower average gross margin, cause a slowdown in discretionary purchases of goods, adversely affect our net sales, growth rates, operating income and result in slower inventory turnover and greater markdowns of inventory, or otherwise materially adversely affect our operations and operating results and could result in impairment charges to intangible assets, goodwill or other long-lived assets.

The economic factors that affect our operations may also adversely affect the operations of our suppliers, which can result in an increase in the cost to us of the goods we sell to our customers or, in more extreme cases, in certain suppliers not producing goods in the volume typically available to us for sale, or adversely impact product margins due to higher labor and material costs of our suppliers that we are unable, or choose not, to pass on to our customers.

We may enter into strategic alliances and other business relationships in the countries in which we have existing operations or in other markets to expand our business. These arrangements (such as ONE, our fintech venture) may not generate the level of sales or profitability we anticipate when entering into the arrangement or may otherwise adversely impact our business and competitive position relative to the results we could have achieved in the absence of such alliance. In addition, any investment we make in connection with a strategic alliance, business relationship or in certain of our divested markets, could materially adversely affect our financial performance.

The emergence, severity, magnitude and duration of global or regional pandemics, epidemics or other health crises are uncertain and difficult to predict. A pandemic, epidemic or contagious disease outbreak that affects humans or the food supply, such as the avian flu impact on poultry and egg production could impact our business operations, demand for our products and services, in-stock positions, costs of doing business, access to inventory, supply chain operations, the extent and duration of measures to try to contain the spread of a virus or other disease (such as travel bans and restrictions, quarantines, shelter-in-place orders, limitations on large gatherings, business and government shutdowns and other restrictions on retailers), our ability to predict future performance, exposure to litigation and our financial performance, among other things. In the event of any global or regional health crisis, customer demand for certain products may fluctuate, customer behaviors may change and consumer disposable income could be negatively impacted, which may challenge our ability to anticipate and/or adjust inventory levels to meet that demand. These risks and their impacts are difficult to predict and could otherwise disrupt and adversely affect our operations and our financial performance.

Natural disasters,disasters and weather conditions, geopolitical tensions and other catastrophic events may have a material adverse effect on our operations and financial performance. Thesewhich may include extreme weather-related events such as hurricanes, tropical storms, typhoons, floods, wildfires, cyclones, tornadoes, winter storms, droughts, and extreme temperatures, anycould ofhave whicha maymaterial beadverse exacerbatedeffect byon our operations and financial performance, and a changing climate,climate ascould wellexacerbate ascertain otherof naturalthese disasters such as earthquakesevents and tsunamis.conditions. Moreover, geopolitical tensions or events; and catastrophic and other events, such as war,war; civil unrest (including theft, looting or vandalism),; terrorist attacks or other; acts of violence, including active shooter situations (such as those that have occurred in our U.S. stores),; or thesimilar loss of merchandise as a result of shrink or theftdisruptions in countries inor which we operate,regions in which our suppliers are locatedoperate or regionsthrough which goods are transported fromcould or through, or in other areas of the world (such as in Ukraine and Israel, armed hostilities in the Red Sea and surrounding areas through which ocean carrier vessels travel to the Suez Canal and delays that have occurred traversing the Panama Canal resulting from drought) couldmaterially adversely affect our operations and financial performance. Protecting the safety of our associates, including our senior leaders, is critical to preventing business disruption and executing on our business strategies and objectives.

We bear the majority of the costs associated with adaptation and the risk of losses incurred as a result of physical damage to, or destruction of, any stores, clubs andclubs, distribution or fulfillment centers and transportation vehicles and equipment; theft, loss or spoilage of inventory; and business interruption caused by such events. These events and their impacts could otherwise disrupt and adversely affect our operations and could materially adversely affect our financial performance. Moreover, our operations in the U.S. comprise a significant portion of our financial and operational performance. Therefore, any of the above matters that uniquely impact or are specifically concentrated in the U.S. could materially adversely affect our financial andcondition, operationalresults performance.of operations or cash flows.

PoliticalWe are exposed to a number of risks in our relationships with our suppliers, many of which are beyond our control, and which could adversely impact our operations and financial performance. These risks include political and economic instability, as well as other impactful events and circumstances (such as we previously experienced (and could experience again) with the pandemic recovery related challenges, including supply chain disruption and production, labor shortages and increases in labor costs) in the countries and regions in which our suppliers andare theirlocated, manufacturersgoods are locatedmanufactured orand regionslocated, and through which goods are transported from or through,; the financial instability of suppliers,suppliers; suppliers not having the financial ability or capacity to fulfill their indemnification obligations to us if called upon, thereby exposing us to the full cost of risks and claims,claims; suppliers' failure to meet our terms and conditions or our supplier standards (including our responsible sourcing standards),; labor problems experienced by our suppliers and their manufacturers,manufacturers; the availability of raw materials to suppliers,suppliers; extreme weather events impacting the growing, manufacturing, mining and harvesting of commodities and products,products; merchandise safety and quality issues,issues; disruption or delay in the transportation of merchandise from the suppliers and manufacturers to our stores, clubs and other facilities, including as a result of extreme weather or labor slowdowns and/or strikes at any port at which a material amount of merchandise we purchase enters into the markets in which we operate,; currency exchange rates,rates; transport availability and cost,cost; transport security, inflationsecurity; and other factors relating to the suppliers and the countries in which they are located are beyond our control.inflation.

Our customers count on us to provide them with quality products at an affordable price. Occasionally, the quality of products that we source from our suppliers fails to meet customer expectations. In many cases, these products are subject to regulatory action or recall. For general merchandise, this could be because the product fails to meet safety standards. For food products, it could be because the product is a source of foodborne illness. For health and wellness products, it could be because the product does not produce the expected result for the customer or harms the customer. Any of these factors could cause customers to avoid purchasing certain products from us or to choose to buy products from a different retailer, even if the quality issue is outside of our control. Any lost confidence on the part of our customers would be difficult and costly to reestablish. When a product we sell does not meet quality or safety standards, there is an increased risk of liability for harm the product may cause our customers. While we rely on our suppliers to meet our safety and quality expectations, and to indemnify us if their products do not, certain suppliers may not have the financial capacity or ability to fulfill their indemnification obligations. In that case, we may be exposed to the full cost of liability claims. Any issue regarding the quality or safety of products we sell, regardless of the cause, could adversely affect our brand, reputation and financial performance.

Given the number of individual transactions we have each year, it is crucial that we maintain uninterrupted operation of our business-critical information systems. Our information systems are subject to damage or interruption from power outages, computer and telecommunications failures, computer viruses, ransomware, worms, other malicious computer programs, denial-of-service attacks, security incidents and breaches from a variety of threat actors, including both cybercriminals and nation state-sponsored actors,actors and catastrophic events suchnoted asabove wildfires,in majorthis orItem extended winter storms, tornadoes, earthquakes and hurricanes, utility outages, usage errors by our associates or contractors and civil or political unrest or armed hostilities.1A. The availability of our information systems and the integrity of data are essential to our business operations, including the processing of transactions, management of our associates, facilities, logistics, inventories, physical stores and clubs and our online operations. Our information systems are not fully redundant and our disaster recovery planning cannot account for all eventualities. If our systems are damaged, breached, attacked, interrupted or otherwise cease to function properly, we may have to make a significant investment to repair or replace them, and may experience loss or corruption of data as well as suffer interruptions in our business operations in the interim. Any interruption to the availability of our information systems or corruption of our data may have a material adverse effect on our business or results of operations. In addition, the cost of securing our systems against failure or attack is considerable, and increases in these costs, particularly in the wake of a breach or failure, could be significant.

If the technology-based systems that give our customers the ability to shop with us online and enable us to deliver products and services do not function effectively, or keep pace with similar offerings of our competitors, our operating results, as well as our ability to grow our omni-channelomnichannel business globally, could be materially adversely affected.

As noted above, customers are using digital means, including websites, captive and third-party digital applications, social media, and emerging agentic platforms to shop with us and our competitors and to do comparison shopping, and we use these digital means along with digital advertising, text messages and email to interact with our customers and enhance their shopping experience. As a part of our omnichannel sales strategy, we offer various pickup, delivery and shipping programs including options where many products available for purchase online can be picked up by the customer or member at a local Walmart store or Sam's Club, which provides additional customer traffic at such stores and clubs. Omnichannel retailing is a rapidly evolving part of the retail industry and of our operations around the world, and we continue to make investments in supply chain automation and enhancements to support our omni-channelomnichannel strategy. We must anticipate and meet our customers' changing expectations while adjusting for technology investments and developments in our competitors' operations through focusing on the building and delivery of a seamless shopping experience across all channels by each operating segment.segment, and structuring these offerings in a manner that allows us to maintain a direct relationship with our customers. We continue to invest in AI and generative AI technologies to enhance our customers’customers' shopping experience and our associate work experience and to improve efficiencies of our supply chain, operations, management functions and talent recruitment and development; however, these are evolving technologies andtechnologies, there are inherent operational and legal complexities associated with implementation of these technologies within our business. When integrating and introducing AI and generative AI technologies into our platforms, processes and systems, we may be exposed to new or expanded liabilities and risks due to elevated governmental scrutiny and monitoring, litigation, data privacy risks and compliance issues in a disparate and at times conflicting regulatory environment, all of which could negatively affect our financial performance and business reputation.

Some of the various technology systems and services on which we rely are provided and managed by an increasing number of third-party service providers. To the extent either our or such other third-party systems and services do not perform or function as anticipated, whether because of an inherent flaw in the technology, faulty implementation or a cybersecurity incident, such failure can significantly interfere with our ability to meet our customers' changing expectations. Any disruption or failure on our part to provide attractive, user-friendly and secure digital platforms that offer a wide assortment of merchandise and services at competitive prices and with low cost and rapid delivery options and that continually meet the changing expectations of online shoppers and developments in onlineonline, digital, and digital platformagentic merchandising and related technology in a cost-efficient manner could place us at a competitive disadvantage, result in the loss of eCommerce and other sales, harm our reputation with customers, have a material adverse impact on the growth of our eCommerce business globally and have a material adverse impact on our business and results of operations.

Like most retailers, we process in our information systems personal information and/or payment information about our customers and members, and we also process information concerning our associates and vendors. In addition, our health and wellness business operations and third-party service providers who handle information on our behalf store and maintain protected health information. Further,We wealso recently acquired VIZIO Holding Corp. and its subsidiaries, which collectscollect certain consumer data, including certain television viewing data. Some of this informationwhich is stored digitally in connection with the digital platforms and technologies that we useused to conduct and facilitate our various businesses. We utilize third-party service providers for a variety of reasons, including, without limitation, for digital storage technology, compute capacity, medical record documentation, content delivery to customers and members, back-office support and other functions. Such providers may have access to information we hold about our customers, members, associates, business partners or vendors. In addition, our eCommerce operations depend upon the secure transmission of confidential information over public networks, including information permitting cashless payments.

Cyber threats are rapidly evolving and those threats and the means for disrupting or obtaining access to information systems or information stored in digital and other storage media are becoming increasingly sophisticated and frequent, and in some cases, they may lead to successful attacks. Unauthorized activities directed against information systems and devices, whether our own or those of our third-party service providers and vendors, have resulted in cybersecurity incidents, including malware, ransomware, denial of service attacks or phishing incidents. We expect that our information systems and those of our third-party service providers, vendors and suppliers will continue to experience such attacks in the future, which could include disruptions to our supply chain system. Cyberattacks and threat actors can be sponsored by particular nation-states, or be the work of sophisticated criminal organizations, insiders (including our associates or contractors) or third parties, each with a wide-rangewide range of motives and expertise. We and the businesses with which we interact have experienced and continue to experience incidents and threats to data and information systems. These incidents and threats have included and are likely to continue to include both random and targeted cyberattacks, computer viruses, phishing incidents, worms, bot attacks, ransomware or other destructive or disruptive software and attempts to misappropriate customer information, including credit card and payment information, and cause system failures and disruptions. The use of remote work infrastructure in recent years has also increased the possible attack surfaces to be exploited. Our logging capabilities, or the logging capabilities of third parties, are also not always complete or sufficiently detailed, affecting our ability to fully investigate and understand the scope of security events. Continued advancements and increased use of AI have intensified existing cybersecurity risks by enabling faster and more automated attack techniques, lowering the barrier to creating sophisticated threats, and further compressing the time in which we must detect and respond to potential threats. Advances in AI are also creating novel categories of cyber threats in which attackers use AI systems to autonomously conduct reconnaissance, generate and tailor exploit code, harvest credentials, craft highly convincing social‑engineering content, and execute large‑scale intrusion or extortion campaigns with minimal human involvement. As noted above, some of our information systems and those of our third-party service providers have experienced cybersecurity incidents or breaches, including during fiscal 2025,2026, and, although to date they have not had a material adverse effect on our operating results or business, there can be no assurance of a similar result in the future.

Our digital platforms, which are increasingly important to our business and continue to grow in complexity and scope, and the systems on which they run, including those applications and systems used in legacy operations and acquired eCommerce, technology or other businesses, are regularly subject to cyberattacks. Those attacks involve attempts to impede the operations of our system or gain unauthorized access to our eCommerce websites (including marketplace platforms) or mobile commerce applications to obtain and misuse customers' or members' information including personal information and/or payment information, and related risks discussed in this Item 1A. Such attacks, if successful, may result in potential data and personal

our system or gain unauthorized access to our eCommerce websites (including marketplace platforms) or mobile commerce applications to obtain and misuse customers' or members' information including personal information and/or payment information, and related risks discussed in this Item 1A. Such attacks, if successful, may result in potential data and personal information misuse and/or loss and may create denials of service or otherwise disable, degrade or sabotage the information systems that enable or support one or more of our digital platforms or otherwise significantly disrupt our customers' and members' shopping experience, our supply chain integrity and continuity and our ability to efficiently operate our business. If we are unable to maintain the security of the information systems that enable or support our digital platforms and keep them operating within acceptable parameters, we could be subject to regulatory fines, suffer loss of sales, reductions in transactions, reputational damage and deterioration of our competitive position and incur liability for any damage to customers, members or others whose personal or confidential information is unlawfully obtained and misused, any of which events could have a material adverse impact on our business and results of operations and impede the execution of our strategy for the growth of our business.

Our reputation with our customers and members is important to the success of our enterprise strategy, which combines traditional retail, membership models, marketplaces, financial services, health and wellness and other customer and business services into a series of interconnected assets to make it seamless for customers to interact with us. Security-related events could be widely publicized and could materially adversely affect our reputation with our customers, members, associates, vendors and shareholders, could harm our competitive position particularly with respect to our eCommerce operations, and

services into a series of interconnected assets to make it seamless for customers to interact with us. Security-related events could be widely publicized and could materially adversely affect our reputation with our customers, members, associates, vendors and shareholders, could harm our competitive position particularly with respect to our eCommerce operations, and could result in a material reduction in our net sales in our eCommerce operations, as well as in our stores, thereby materially adversely affecting our operations, net sales, growth rates, operating income, results of operations, financial position, cash flows and liquidity. Such events could also result in the release to the public of confidential information about our operations and financial position and performance and could result in litigation or other legal actions against us or the imposition of penalties, fines, fees or liabilities, which may not be covered by our insurance policies. Moreover, a security compromise or operationally impactful malware event, such as ransomware, could require us to devote significant management resources to address the problems created by the issue and to expend significant additional resources to upgrade further the security measures we employ to guard personal and confidential information against cyberattacks and other attempts to access or otherwise compromise such information and could result in a disruption of our operations, particularly our digital operations.

We also have compliance obligations associated with privacy laws enacted to protect and regulate the collection, use, retention, disclosure and transfer of personal information, which include liability for security and privacy breaches. A growing patchwork of AI laws and targeted privacy and consumer protection statutes may also create varying obligations around notice, customer rights and appeals, data minimization, restrictions on sensitive data, targeted advertising and certain forms of profiling, and these requirements continue to evolve. Among other obligations, breaches may trigger obligations under U.S. federal and state laws and laws in certain other countries to notify affected individuals, government agencies and the media. Consequently, cybersecurity incidents that result in a data breach or our failure to comply with such laws could subject us to fines, sanctions and other legal liability and harm our reputation.

Changes in third-party reimbursements and contracts, typetype, or scope of offerings of our health and wellness business could adversely affect our overall results of operations, cash flows and liquidity.

A large majority of our retail pharmacy net sales are generated by filling prescriptions for which we receive payment through established contractual relationships with third-party payers and payment administrators, such as private insurers, governmental agencies and pharmacy benefit managers ("PBMs"). Our retail pharmacy operations are subject to numerous risks, including: reductions in the third-party reimbursement rates for drugs; changes in our payer mix (i.e., shifts in the relative distribution of our pharmacy customers across drug insurance plans and programs toward plans and programs with less favorable reimbursement terms); changes in third-party payer drug formularies (i.e., the schedule of prescription drugs approved for reimbursement or which otherwise receive preferential coverage treatment); growth in, and our participation in or exclusion from, pharmacy payer network arrangements, including exclusive and preferred pharmacy network arrangements operated by PBMs and/or any insurance plan or program; increases in the prices we pay for brand name and generic prescription drugs we sell; increases in the administrative burdens associated with seeking third-party reimbursement; changes in the frequency with which new brand name pharmaceuticals become available to consumers; introduction of lower cost generic drugs as substitutes for existing brand name drugs for which there was no prior generic drug competition; changes in drug mix (i.e., the relative distribution of drugs customers purchase at our pharmacies between brands and generics); changes in the health insurance market generally; increased governmental focus on reducing drug prices including most favored nation pricing policies, maximum fair price negotiations, and direct-to-consumer pharmacy delivery models; changes in the scope of or the elimination of Medicare Part D or Medicaid drug programs; increased competition from other retail pharmacy operations including competitors offering online retail pharmacy options and/or home delivery options; further consolidation and strategic alliances among third-party payers, PBMs or purchasers of drugs; overall economic conditions and the ability of our pharmacy customers to pay for drugs prescribed for them to the extent the costs are not reimbursed by a third-party; failure to meet any performance or incentive thresholds to which our level of third-party reimbursement may be subject; changes in laws or regulations or the practices of third-party payers and PBMs related to the use of third-party financial assistance to assist our pharmacy customers with paying for drugs prescribed for them; and any additional changes in the state or federal regulatory environment for the retail pharmacy industry and the pharmaceutical industry, including as a result of health reform efforts and other changes to or novel interpretations of existing state or federal laws, rules and regulations that affect our retail pharmacy business.

If the supply of certain pharmaceuticals provided by one or more of our vendors were to be disrupted for any reason, our pharmacy operations could be severely affected until at least such time as we could obtain a new supplier for such pharmaceuticals. Any such disruption could cause reputational damage and result in a significant number of our pharmacy customers transferring their prescriptions to other pharmacies.

Our operations in countries other than the U.S. are conducted primarily in the local currencies of those countries. Our Consolidated Financial Statements are denominated in U.S. dollars, and to prepare those financial statements we must translate the amounts of the assets, liabilities, net sales, other revenues and expenses of our operations outside of the U.S. from local currencies into U.S. dollars using exchange rates for the current period. In recent years, fluctuations in currency exchange rates that were unfavorable have had adverse effects on our reported results of operations.

In foreign countries in which we have operations, a risk exists that our associates, contractors or agents could, in contravention of our policies, engage in business practices prohibited by U.S. laws and regulations applicable to us, such as the Foreign Corrupt Practices Act or U.S. sanctions laws and regulations or the laws and regulations of other countries. Our global policies designed to regulate such business practices and our global compliance programs designed to ensure compliance with these laws and regulations may not be adequate to prevent the risk that one or more of our associates, contractors or agents, including those based in or from countries where practices that violate such U.S. laws and regulations or the laws and regulations of other countries may be customary, will engage in business practices that are appropriately regulated by our policies, circumvent our compliance programs and, by doing so, violate such laws and regulations. Any such violations, even if prohibited by our internal policies, could subject us to fines and penalties and adversely affect our business or financial performance and our reputation.

In fiscal 2025,2026, our Walmart U.S. and Sam's Club U.S. operating segments generated approximately 82% of our consolidated net sales. A significant portion of the general merchandise we sell in our U.S. stores and clubs is manufactured in other countries. Significant changes in tax and trade policies, including tariffs, trade barriers, other restrictions on the exportation and importation of goods and government regulations affecting trade between the U.S. and other countries where we source many of the products we sell incan our storesimpact, and clubs could have an adverse effect onimpacted, our business and financialprofit performance. A significant portion of the general merchandise we sell in our U.S. stores and clubs is manufactured in other countries. Any such actions,margins, including the imposition of further tariffs on imports could increase the cost to us of such merchandise (whether imported directly or indirectly) and causethrough increases in the costs at which we purchase merchandise and the prices at which we sell such merchandise to our customers, which could materially adversely affectand the costs we incur in pursuing our strategic initiatives, including those set forth under the headings Strategic Risks and Operational Risks above in this Item 1A. If we are unable to successfully manage the various impacts that changes in these tax and trade policies have on our business, our results of operations and financial performance could be impacted. We experienced the impacts noted above during fiscal 2026 as a result of incremental import tariffs. We expect the dynamic tariff environment to continue, including in fiscal 2027, and cannot predict with certainty the future impact that this environment will have on our U.S.results and internationalof operations asor wellfinancial asperformance, ourwhich business.could be material.

In addition, legislatures and taxing authorities in many jurisdictions in which we operate may enact changes toto, or seek to enforce novel interpretations ofof, theirexisting tax rules.laws, Theseincluding changes could include modifications that haveboth temporary effect and more permanent changes.measures. For example, the Organization for Economic Cooperation and Development (the "OECD"), the European Union and other countries (including countries in which we operate) have committed to enacting substantial changes to numerous long-standing tax principles impacting howtaxation of large multinational enterprises are taxed.enterprises. In particular, the OECD's Global Minimum Tax (Pillar Two) initiativehas introduces a 15% global minimum tax applied on a country-by-country basis, which becamebecome effective in many jurisdictions in whichwhere we operate startingand Januarycontinues 1,to 2024.evolve through ongoing legislative and administrative guidance. These rules are complex, and may require significant data, systems and process changes to comply. The impact of these potential new rulesdevelopments, as well as any other changes in domestic and international tax ruleslaws and regulations could have a material effect on our cash taxes, affect our effective tax rate.rate and increase our compliance, audit and controversy costs, any of which could materially adversely affect our financial performance.

We operate in complex regulated environments in the U.S. and other countries in which we operate and could be materially adversely affected by changes to existing legal requirements, including the related interpretations and enforcement practices, new legal requirements and/or any failure to comply with applicable regulations. In addition, the degree of regulatory, political, and media scrutiny we face increases the likelihood that our efforts to adhere to our practices and procedures to comply with these laws and legal requirements may be subject to frequent or increasing challenges. If we fail to prevent independent contractors or third-party service providers from violating our policies or applicable laws or committing any fraudulent acts against us or our customers, it could harm our business or damage our reputation, and we could face liability for unlawful activities by such third parties.

Our health and wellness operations in the U.S. are subject to numerous federal, state and local laws and regulations including, but not limited to, those related to: licensing; reimbursement arrangements and other requirements and restrictions; registration and regulation of pharmacies; dispensing and sale of controlled substances and products containing pseudoephedrine; governmental (including Medicare and Medicaid) and commercial reimbursement; data privacy and security and the sharing and interoperability of data, including obligations and restrictions related to health information (such as those imposed under HIPAA); protection of consumer health data; billing and coding for healthcare services and properly handling overpayments; debt collection; necessity and adequacy of healthcare services; relationships with referral sources and referral recipients and other fraud and abuse issues, such as those addressed by anti-kickback and false claims laws and patient inducement regulations; qualification of healthcare practitioners; quality and standards of medical services and equipment; and the practice of the professions of pharmacy and optometry.

Additionally, through various financial service partners and our ONEOnePay fintech venture, we offer various services such as money transfers, digital payment platforms, bill payment, money orders, check cashing, prepaid access, co-branded creditscredit cards, limited access to cryptocurrency and equity investment products, installment lending and earned wage access. These products and services require us to comply with legal and regulatory requirements, including those intended to help detect and prevent fraud and other illicit activity, the sale and custody of equity and cryptocurrency products, privacy, information security, anti-money laundering and sanctions regimes and consumer protection under U.S. state and federal laws and regulations, as well as those of certain other countries. Failure to comply with these laws and regulations could result in fines, sanctions, penalties and harm to our reputation. Increased U.S. regulation of non-bank financial institutions may also result in additional requirements and scrutiny of certain financial services we offer.

We are also governed by foreign, national and state laws and regulations of general applicability, including laws and regulations related to competition and antitrust matters; protection of the environment and health and safety matters, including exposure to, and the management and disposal of, hazardous substances; food and drug safety, including drug supply chain security requirements; consumer protection, and safety, including the availability, sale, price label accuracy, membership subscription and cancellation; advertisement and promotion of products we sell and the financial services we offer (including through our digital channels, stores and clubs, as well as our ONEOnePay fintech venture); anti-money laundering prohibitions; consumer financial protection laws; economic, trade and other sanctions matters; licensure, including supply chain logistics licensure, certification and enrollment with government programs; cross border data transfer; data privacy, cybersecurity and thecybersecurity, sharing and interoperability of data and use of AI technology; working conditions, workplace health and safety, equal employment opportunity, worker classification, employee benefit and other labor and employment matters; and health and wellness related regulations for our pharmacy and optometry operations. Failure to meet these requirements could affect the profitability of our business activities; limit our ability to pursue business opportunities or conduct business in certain jurisdictions; require changes to business practices or governance or alter our relationships with our customers, partners and other third parties, including our ability to continue certain relationships in Mexico, India or other international jurisdictions; result in increased costs related to regulatory oversight and compliance, litigation-related settlements, judgments or expenses, restitution to customers or the imposition of fines or monetary penalties.

Governmental and societal attention to ESGsocial and environmental matters, including expanding mandatory and voluntary reporting diligence, and disclosure topics such as climate change, sustainability (including with respect to our supply chain), natural resources, waste reduction, energy, human capital and risk oversight could change the nature, scope and complexity of matters that we are required to control, assess and report.

In discussing our operating results, the term currency exchange rates refers to the currency exchange rates we use to convert the operating results for countries where the functional currency is not the U.S. dollar into U.S. dollars. We calculate the effect of changes in currency exchange rates as the difference between current period activity translated using the current period's currency exchange rates and the comparable prior year period's currency exchange rates. Additionally, no currency exchange rate fluctuations are calculated for non-USD acquisitions until owned for 12 months. Throughout our discussion, we refer to the results of this calculation as the impact of currency exchange rate fluctuations. Volatility in currency exchange rates have impacted and may continue to impact the results, including net sales and operating income, of the Company and the Walmart International segment.

We expect continued uncertainty in our business and the global economy due to inflationarythe trends;following factors: tariffs and trade restrictions; inflationary trends; fluctuations in global currencies; swings in macroeconomic conditions and their effect on consumer confidence; volatilitychanges in employment trends; volatility in fuel prices; and supply chain pressures, any of which may impact our results. ForWhile we operate in a detailedhighly discussiondynamic tariff environment, less than one third of what we sell in the U.S. is imported, with most of our imports coming from China, Mexico, Vietnam, India and Canada. Information on certain risks, factors, and uncertainties that can affect our operating results ofand operationsan byinvestment reportablein segment,our refersecurities tocan be found herein under "ResultsItem of1A. OperationsRisk Factors." below.

•Growth - serve customers through a seamless omni-channelomnichannel experience;

Our objective of prioritizing growth means we will focus on serving customers and members however they want to shop through our omni-channelomnichannel business model. This includes increasing comparable store and club sales through increasing membership at Sam's Club U.S. and through Walmart+, accelerating eCommerce sales growth and expansion of omni-channelomnichannel initiatives that complement our strategy.

ComparableOur sales is a metric that indicates the performancediscussion of our existing stores and clubs by measuring the change in sales for such stores and clubs, including eCommerce sales, for a particular period over the corresponding period in the previous year. The retail industry generally reports comparable sales using the retail calendar (also known as the 4-5-4 calendar). To be consistent with the retail industry, we provide comparable sales using the retail calendar in our quarterly earnings releases. However, when we discuss our comparable sales below,below we are referringrefers to our calendar comparable sales calculated using our fiscal calendar, which may result in differences when compared to comparable sales using the retail calendar.calendar (also known as the 4-5-4 calendar) as provided in our quarterly earnings releases. We report on comparable sales in the U.S. as we believe it is a meaningful metric within the context of the U.S. retail market where there is a single currency, one inflationary market and generally consistent store and club formats from year to year.

Comparable sales in the U.S., including fuel, increased 4.8% and 4.9% in fiscal 2025 and 2024, respectively, when compared to the previous fiscal year. Walmart U.S. comparable sales increased 4.8%4.3% and 5.5%4.8% in fiscal 2026 and 2025, respectively. Comparable sales in fiscal 2026 were driven by growth in average ticket and transactions, and also reflected growth in unit volumes and strength in all merchandise categories. Comparable sales in fiscal 2025 and 2024, respectively. For fiscal 2025, comparable sales growth waswere driven by growth in transactions and unit volumes, with strong sales in grocery and health and wellness. For fiscal 2024, comparable sales growth was driven by growth in transactions combined with growth in average ticket, including strong sales in grocery and health and wellness.WalmartWalmart U.S. eCommerce sales positively contributed approximately 2.9%4.3% and 2.6%2.9% to comparable sales for fiscal 20252026 and 2024,2025, respectively,respectively. whichThis growth reflects continued strength in customer and Walmart+ member engagement with omnichannel offerings, and was primarily driven by store-fulfilled pickup and delivery.

includingSam's Club U.S. comparable sales increased 2.9% and 4.7% in fiscal 2026 and 2025, respectively. For fiscal 2026, comparable sales were driven by growth in unit volumes and transactions, reflecting strong sales in grocery, health and wellness and general merchandise. For fiscal 2025, comparable sales were driven by growth in transactions and unit volumes, with strong sales in grocery and health and wellness. Additionally, fiscal 20252026 and 20242025 growth was partially offset by lower fuel sales, negatively impacting comparable sales by 1.9% and 1.5%, respectively, primarily due to lower marketfuel prices. Sam's Club U.S. eCommerce sales positively contributed approximately 2.3%3.3% and 1.7%2.3% to comparable sales for fiscal 20252026 and 2024,2025, respectively, which wasreflects primarilycontinued drivenstrength byin club-fulfilledmember curbsideengagement pickupwith andomnichannel delivery.offerings.

Our objective of prioritizing margin focuses on growth with a focus on incremental margin accretion through a combination of productivity improvements as well as category and business mix. We invest in technology and process improvements to increase productivity, manage inventory and reduce costs and we operate with discipline by managing expenses and optimizing the efficiency of how we work. We measure operating discipline through expense leverage, which we define as net sales growing at a faster rate than operating, selling, general and administrative ("operating") expenses. Additionally, we focus on our mix of businesses, including expanding our ecosystem in higher margin areas, such as digital advertising and marketplace.advertising. Our objective is to achieve operating income leverage, which we define as growing operating income at a faster rate than net sales.

(1) Gross profit defined as net sales less cost of sales.

Gross profit as a percentage of net sales ("gross profit rate") increased 408 and 2740 basis points for fiscal 20252026 and 2024,2025, respectively, when compared to the previous fiscal year. The increasesincrease werein fiscal 2026 was primarily driven by the Walmart U.S. segment, due to disciplined inventory management, as well as growth in higher margin businesses globally. The increase in fiscal 2025 was primarily driven by the Walmart U.S. segment, due to managing prices aligned to our competitive historic price gaps, as well as growth in higher margin businesses globally,globally. In both years, the increases were partially offset by mix shifts into lower margin merchandise categories.categories Additionally,across thesegments, increaseas inwell fiscalas 2024ongoing benefitedchannel fromand lappingformat highermix markdowns incurredshifts in the priorWalmart year.International segment.

Operating income as a percentage of net sales increaseddecreased 15 and 8313 basis points for fiscal 20252026 and 2024,increased 15 basis points for fiscal 2025, respectively, primarily due to the factors described above,above as well as fromand strong growth in membership income globally.

Our calculation of ROI is considered a non-GAAP financial measure because weit calculate ROI usinguses financial measures that excludediffer andfrom includethose amounts that are included and excludedused in ROA, the most directly comparable GAAP financial measure. ROA is consolidated net income for the period divided by average total assets for the period. We define ROI as operating income plus interest income, depreciation and amortization, and rent expense for the trailing 12 months divided by average invested capital during the period. We consider average invested capital to be the average of our beginning and ending total assets, plus average accumulated depreciation and amortization, less average accounts payable and average accrued liabilities for that period. Although ROI is a standard financial measure, numerous methods exist for calculating a company's ROI. As a result, the method used by management to calculate our ROI may differ from the methods used by other companies to calculate their ROI.

(1) The average is basedcalculated on the addition ofusing the account balance at the end of the current period to the account balance at the end of theand prior periodcomparative and dividing by two.periods.

Strategic Capital Allocation

We define free cash flow as net cash provided by operating activities in a period minus payments for property and equipment made in that period. Walmart's definition of free cash flow is limited in that it does not represent residual cash flows available for discretionary expenditures due to the fact that the measure does not deduct the payments required for debt service and other contractual obligations or payments made for business acquisitions. Therefore, we believe it is important to view free cash flow as a measure that provides supplemental information to our Consolidated Statements of Cash Flows.

(1) "Net cash used in investing activities" includes payments for property and equipment, which is also included in our computation of free cash flow.

(1) Membership and other income includes membership fees and other items such as rental and tenant income, recycling income, gift card breakage income, as well as other income from corporate campus facilities.

(2) Gross profit is defined as net sales less cost of sales. Operating expenses refers to operating, selling, general and administrative expenses.

Our total revenues increased $32.2 billion or 4.7% and $32.9 billion or 5.1% and $36.8 billion or 6.0% for fiscal 20252026 and 2024,2025, respectively, when compared to the previous fiscal year. These increases in revenues were primarily due to increases in net sales, which increased $31.9 billion or 5.0%4.7% and $36.8$31.9 billion or 6.1%5.0% for fiscal 20252026 and 2024,2025, respectively, when compared to the previous fiscal year. The increases were primarily due to strong positive comparable sales across our U.S. segments and international markets,markets. In fiscal 2026, growth was primarily driven primarilyby byincreases in average ticket and transactions, and also reflected growth in unit volumes, while fiscal 2025 growth was primarily driven by higher transactions and unit volumes,volumes. whichBoth includedyears include strength in eCommerce as well as strong sales in grocery,grocery and health and wellness.wellness, with fiscal 2026 also benefiting from improved sales in general merchandise. Net sales were negatively impacted by $3.2$2.8 billion and positively impacted by $3.0$3.2 billion of fluctuations in currency exchange rates during fiscal 20252026 and 2024,2025, respectively. Membership and other income increased $1.0 billion and $0.1 billion for fiscal 2025 and fiscal 2024, primarily driven by growth in membership fee income globally.

Our gross profit rate increased 408 and 2740 basis points for fiscal 20252026 and 2024,2025, respectively, when compared to the previous fiscal year. The increasesincrease werein fiscal 2026 was primarily driven by the Walmart U.S. segment, due to disciplined inventory management, as well as growth in higher margin businesses globally. The increase in fiscal 2025 was primarily driven by the Walmart U.S. segment, due to managing prices aligned to our competitive historic price gaps, as well as growth in higher margin businesses globally,globally. In both years, the increases were partially offset by mix shifts into lower margin merchandise categories.categories Additionally,across thesegments, increaseas inwell fiscalas 2024ongoing benefitedchannel fromand lappingformat highermix markdowns incurredshifts in the priorWalmart year.International segment.

Other gains and losses consist of certain non-operating items, such as the changechanges in the fair value of our investments and gains or losses on business dispositions,investments, which by their nature can fluctuate from period to period. Other gains and losses consistedresulted in a net gain of $2.1 billion and a net lossesloss of $0.8 billion and $3.0 billion in fiscal 20252026 and 2024,2025, respectively, which primarily consisteddriven ofby changes in the fair value of our equity and other investments drivendue byto changesfluctuations in their underlying stock prices.

Our effective income tax rate was 24.4%, 23.4%, 25.5%, and 33.6%25.5% for fiscal 2025,2026, 20242025 and 2023,2024, respectively. The increase in effective income tax rate in fiscal 2026 compared to fiscal 2025 is primarily due to the share-based compensation charge recorded at the Company's PhonePe subsidiary, which provided no tax benefit. The decrease in effective tax rate in fiscal 2025 compared to fiscal 2024 is primarily due to the tax impact on changes in fair value of our investments. The higher effective tax rate in fiscal 2023 compared to fiscal 2025 and fiscal 2024 is primarily related to the tax impacts of the separation of Flipkart and PhonePe. Our effective income tax rate may also fluctuate as a result of various factors, including changes in our assessment of unrecognized tax benefits, valuation allowances, business operations, acquisitions, investments, entry into new businesses and geographies, intercompany transactions, changes in tax law, changes in the administrative practices, principles, and interpretations related to tax, and the mix and size of earnings among our U.S. operations and international operations, which are subject to statutory rates that are generally higher than the U.S. statutory rate. The reconciliation from the U.S. statutory rate to the effective income tax rates for fiscal 2025,2026, 20242025 and 20232024 is provided in Note 9.8.

As a result of the factors discussed above, we reported $20.2$22.3 billion and $16.3$20.2 billion of consolidated net income for fiscal 20252026 and 2024,2025, respectively, which representsrepresent an increaseincreases of $3.9$2.1 billion and $5.0$3.9 billion for fiscal 20252026 and 2024,2025, respectively, when compared to the previous fiscal year. Diluted net income per common share attributable to Walmart ("EPS") was $2.41,$2.73, $1.91$2.41 and $1.42$1.91 for fiscal 2025,2026, 20242025 and 2023,2024, respectively.

Net sales for the Walmart U.S. segment increased $20.6 billion or 4.7%4.4% and $21.3$20.6 billion or 5.1%4.7% for fiscal 20252026 and 2024,2025, respectively, when compared to the previous fiscal year. The increases in net sales were primarily due to increases in comparable sales of 4.8%4.3% and 5.5%4.8% for fiscal 20252026 and 2024,2025, respectively. Comparable sales in fiscal 2026 were driven by growth in average ticket and transactions, and also reflected growth in unit volumes and strength in all merchandise categories. Comparable sales in fiscal 2025 were driven by growth in transactions and unit volumes, with strong sales in grocery and health and wellness. Comparable sales in fiscal 2024 were driven by growth in transactions combined with growth in average ticket, including strong sales in grocery and health and wellness. Walmart U.S. eCommerce sales positively contributed approximately 2.9%4.3% and 2.6%2.9% to comparable sales for fiscal 20252026 and 2024,2025, respectively,respectively. whichThis growth reflects continued strength in customer and Walmart+ member engagement with omnichannel offerings, and was primarily driven by store-fulfilled pickup and delivery.

Gross profit rate increased 4722 and 2047 basis points for fiscal 20252026 and 2024,2025, respectively, when compared to the previous fiscal year. The increase infor fiscal 2025 gross profit rate2026 was primarily driven by disciplined inventory management and growth in higher margin businesses, partially offset by mix shifts into lower margin merchandise categories. The increase for fiscal 2025 was primarily due to managing prices aligned to our competitive historic price gaps and growth in higher margin businesses, partially offset by mix shifts into lower margin merchandise categories. The increase in fiscal 2024 gross profit rate was primarily due to managing prices aligned to our competitive historic price gaps and lapping higher net markdowns incurred in the prior year, partially offset by product mix shifts into lower margin categories.

Operating expenses as a percentage of segment net sales increased 4415 and 944 basis points for fiscal 20252026 and 2024,2025, respectively, when compared to the previous fiscal year. The increase for fiscal 20252026 was primarily due to higher self-insured general liability claims expense and increased depreciation related to our capital investments. For fiscal 2025, the increase was primarily due to increased marketing expenses, higher variable pay as a result of exceeding planned performance and increased depreciation expenses. For fiscal 2024, the increase was driven by higher variable pay relative to the prior year as a result of exceeding our planned performance.

Net sales for the Walmart International segment increased $8.5 billion or 7.0% and $7.2 billion or 6.3% and $13.7 billion or 13.5% for fiscal 20252026 and 2024,2025, respectively, when compared to the previous fiscal year. ForNet fiscalsales 2025, the increasegrowth was primarily due to positive comparable sales ingrowth all ofacross our international markets, which includedincludes strengthstrong ineCommerce eCommerce,growth of $6.3 billion and $4.7 billion for fiscal 2026 and 2025, respectively. The increases were partially offset by negative fluctuations in currency exchange rates of $2.8 billion and $3.2 billion.billion Forfor fiscal 2024, the increase was primarily due to positive comparable sales across our international markets2026 and positive2025, fluctuations in currency exchange rates of $3.0 billion.respectively.

Gross profit rate decreased 49 basis points for fiscal 2026 and increased 20 basis points for both fiscal 2025 and 20242025, when compared to the previous fiscal year. For fiscal 2025,2026, the decrease was primarily due to ongoing channel and format mix shifts, as well as strategic growth investments in price and delivery capabilities, partially offset by growth in higher margin businesses. The increase in fiscal 2025 was primarily due to improved eCommerce margin and business mix changes, partially offset by ongoing channel and format mix changes. For fiscal 2024, the increase was primarily driven by supply chain efficiencies partially offset by ongoing channel and format mix shifts.

Operating expenses as a percentage of segment net sales decreasedincreased 5 and 15210 basis points for fiscal 20252026 and 2024,decreased respectively,5 basis points for fiscal 2025, when compared to the previous fiscal year. The decreaseincrease for fiscal 2026 was primarily due to a charge of $0.7 billion related to PhonePe's modification of certain share-based payment arrangements in operatingcontemplation expensesof a potential public offering (refer to Note 3), partially offset by strong sales as awell percentageas offormat segmentmix netshifts. salesThe decrease for fiscal 2025 was primarily due to increased sales driving expense leverage, partially offset by planned investments in associate wages and strategic priorities in Mexico and Central America. The decrease in operating expenses as a percentage of segment net sales for fiscal 2024, was primarily due to the lapping of business reorganization and restructuring charges incurred related to Flipkart and Massmart in fiscal 2023 and an increase in sales in fiscal 2024.

As a result of the factors discussed above, segment operating income increaseddecreased $0.6$0.4 billion and $1.9increased $0.6 billion for fiscal 20252026 and 2024,2025, respectively, when compared to the previous fiscal year.

(1) We believe the "Excluding Fuel" information is useful to investors because it permits investors to understand the effect of the Sam's Club U.S. segment's fuel sales on its results of operations, which are impacted by the volatility of fuel prices. Volatility in fuel prices may continue to impact the operating results of the Sam's Club U.S. segment in the future.

Net sales for the Sam's Club U.S. segment increased $2.8 billion or 3.1% and $4.1 billion or 4.7% and $1.8 billion or 2.2% for fiscal 20252026 and 2024,2025, respectively, when compared to the previous fiscal year. The increases in net sales were primarily due to increases in comparable sales, including fuel, of 4.7%2.9% and 2.3%4.7% for fiscal 20252026 and 2024,2025, respectively. Comparable sales in fiscal 2026 were driven by growth in unit volumes and transactions, reflecting strong sales in grocery, health and wellness and general merchandise. Comparable sales in fiscal 2025 were driven by growth in transactions and unit volumes, with strong sales in grocery and health and wellness. Comparable sales in fiscal 2024 were driven by growth in transactions and average ticket, including strong sales in grocery and health and wellness. Additionally, fiscal 20252026 and 20242025 growth was partially offset by lower fuel sales, negatively impacting comparable sales by 1.9% and 1.5%, respectively, primarily due to lower marketfuel prices. Sam's Club U.S. eCommerce sales positively contributed approximately 2.3%3.3% and 1.7%2.3% to comparable sales for fiscal 20252026 and 2024,2025, respectively, which wasreflects primarilycontinued drivenstrength byin club-fulfilledmember curbsideengagement pickupwith andomnichannel delivery.offerings.

Membership and other income increased 13.3%8.7% and 7.5%13.3% for fiscal 20252026 and 2024,2025, respectively, when compared to the previous fiscal year. For fiscal 20252026 and 2024,2025, the increases were primarily due to growth in the membership base and Plus penetration. Fiscal 2026 was also positively impacted by additional breakage income related to unredeemed Sam's Cash rewards, while fiscal 2025 and 2024 were alsowas positively impacted by the expiration of a promotional offering offsetting membership fee increases during the fourth quarter of fiscal 2024.

Gross profit rate increased 374 and 5537 basis points for fiscal 20252026 and 2024,2025, respectively, when compared to the previous fiscal year. ForThe increase for fiscal 2025,2026 was primarily due to operational efficiencies and higher margins in fuel, partially offset by higher eCommerce fulfillment costs and the impact of reorganization charges related to strategic supply chain decisions. The increase infor grossfiscal profit rate2025 was primarily due to improved operational efficiencies related to merchandise flow and increased margins in fuel, partially offset by higher eCommerce fulfillment costs. For fiscal 2024, the increase in gross profit rate was primarily due to the lapping of elevated markdowns in the prior year. Additionally, fiscal 2025costs and 2024 gross profit rates were partially offset by product mix shifts into lower margin categories.

In addition to the other information set forth in this report, you should carefully consider the risk factors disclosed in Part I, Item 1A, under the caption "Risk Factors," of our Annual Report on Form 10-K for the fiscal year ended January 31, 2026, which risks could materially and adversely affect our business, results of operations, financial condition and liquidity. No material change in the risk factors discussed in such Form 10-K has occurred. Such risk factors do not identify all risks that we face because our business operations could also be affected by additional factors that are not presently known to us or that we

face because our business operations could also be affected by additional factors that are not presently known to us or that we currently consider to be immaterial to our operations. Our business operations could also be affected by additional factors that apply to all companies operating in the U.S. and globally.

This discussion, which presents Walmart Inc.'s ("Walmart," the "Company," "our," "us" or "we") results for periods occurring in the fiscal year ending January 31, 2027 ("fiscal 2027") and the fiscal year ended January 31, 2026 ("fiscal 2026"), should be read in conjunction with our Condensed Consolidated Financial Statements as of and for the three and six months ended AprilJuly 30,31, 2026, and the accompanying notes included in Part I, Item 1 of this Quarterly Report on Form 10-Q, as well as our Consolidated Financial Statements as of and for the year ended January 31, 2026, the accompanying notes and the related Management's Discussion and Analysis of Financial Condition and Results of Operations, contained in our Annual Report on Form 10-K for the year ended January 31, 2026.

We expect continued uncertainty in our business and the global economy due to the following factors: tariffs and trade restrictions, including potentialtariff refunds; inflationary trends; fluctuations in global currencies; swings in macroeconomic conditions and their effect on consumer confidence; changes in employment trends; volatility in fuel prices; and supply chain pressures, any of which may impact our results. While we operate in a highly dynamic tariff environment, less than one third of what we sell in the U.S. is imported, with most of our imports coming from China,Vietnam,China, Vietnam, Mexico, India and Canada. We are committed to helping customers save money and live better through everyday low prices, supported by everyday low costs. Our operating results are influenced in part by our sourcing, pricing, merchandising, inventory management and other strategies in response to cost increases, which are further discussed in our Annual Report on Form 10-K. Information on certain risks, factors, and uncertainties that can affect our operating results and an investment in our securities can be found herein under "Item 1A. Risk Factors" and "Item 5. Other Information."

Calendar comparable sales, as well as the impact of fuel, for the three and six months ended AprilJuly 30,31, 2026 and 2025, were as follows:

Walmart U.S. comparable sales increased 4.3%3.3% and 3.8% for the three and six months ended AprilJuly 30,31, 2026, respectively, driven by growth in transactions and average ticket, reflecting strength in grocerygrocery, partially offset by a decrease in health and wellness primarily due to the impact from maximum fair price regulation on certain prescription drugs, which went into effect in January 2026. Growth for the six months ended July 31, 2026 also reflects strength in general merchandise. Walmart U.S. eCommerce sales positively contributed approximately 5.2%4.9% and 5.1% to comparable sales for the three and six months ended AprilJuly 30,31, 2026.2026, respectively. This growth reflects continued strength in customer and Walmart+ member engagement with omnichannel offerings, which was primarily driven by store-fulfilled delivery.

Sam's Club U.S. comparable sales increased 5.9%8.6% and 7.3% for the three and six months ended AprilJuly 30,31, 2026, respectively, with growth in transactions and unit volumes, reflecting strength in grocery and general merchandise. Additionally, higher fuel sales, driven by higher fuel prices and volumes, positively impacted comparable sales by 2.1%4.2% and 3.2% for the three and six months ended AprilJuly 30,31, 2026.2026, respectively. Sam's Club U.S. eCommerce sales positively contributed approximately 3.1% to comparable sales for both the three and six months ended AprilJuly 30,31, 2026, reflecting continued strength in member engagement with omnichannel offerings, such as club-fulfilled delivery.

Gross profit as a percentage of net sales ("gross profit rate") increased 696 and 53 basis points for the three and six months ended AprilJuly 30,31, 2026, respectively, when compared to the same periodperiods in the previous fiscal year, primarily due to thetariff Walmartrefunds, U.S.partially segment, drivenoffset by merchandiseprice mix shiftsinvestments and higher fuel costs within our supply chain. Gross profit rate also benefited from continued growth in higher margin businesses, including advertising, partially offset by higher fuel costs within our supply chain and increased eCommerce fulfillment costs in the Sam's Club U.S. segment.advertising.

Operating income as a percentage of net sales decreasedincreased 889 and 42 basis points for the three and six months ended AprilJuly 30,31, 2026, respectively, primarily due to the factors described above.

ROA was 8.4%8.0% and 7.5%8.3% for the trailing 12 months ended AprilJuly 30,31, 2026 and 2025, respectively. The increasedecrease in ROA was primarily due to an increase in net income as a result of net increasesdecreases in the fair value of our equity and other investments combined with higher operating income, partially offset byand an increase in average total assets dueresulting tofrom higher purchases of property and equipment.equipment, offset by an increase in operating income. ROI was 14.9%15.4% and 15.3%15.1% for the trailing 12 months ended AprilJuly 30,31, 2026 and 2025, respectively. The decreaseincrease in ROI was primarily due to an increase in operating income from improved business performance, partially offset by an increase in average invested capital due to higher purchases of property and equipment. ROI benefited from increased operating income due to improved business performance, which was partially offset by the non-cash share-based compensation charge at PhonePe in the trailing 12 months as well as business reorganization charges and certain legal matters.

Net cash provided by operating activities was $4.7$19.7 billion for the threesix months ended AprilJuly 30,31, 2026, which represents aan decreaseincrease of $0.7$1.4 billion when compared to the same period in the previous fiscal year. The decreaseincrease was primarily due to timing of inventory receipts, partially offset by timing of certain payments and an increase in cash provided by operating income.income, partially offset by timing of inventory receipts. Free cash flow for the threesix months ended AprilJuly 30,31, 2026 was negative $1.9$5.5 billion, which represents a decrease of $2.4$1.4 billion when compared to the same period in the previous fiscal year. The decrease in free cash flow was due to an increase of $1.7$2.8 billion in capital expenditures to support our omnichannel growth strategystrategy, combinedpartially withoffset by the decreaseincrease in net cash provided by operating activities described above.

Our total revenues increased $12.1$10.5 billion or 7.3%5.9% and $22.7 billion or 6.6% for the three and six months ended AprilJuly 30,31, 20262026, respectively, when compared to the same periodperiods in the previous fiscal year. The increaseincreases waswere primarily due to strong positive comparable sales in our U.S. segments and international markets driven by growth in transactions. eCommerce net sales grew $8.5$8.2 billion or 26%23% and $16.7 billion or 24% for the three and six months ended July 31, 2026, respectively, primarily driven by store and club-fulfilled delivery. Net sales growth also reflected strong sales in grocery and general merchandise across our segments. Net sales for the three and six months ended AprilJuly 30,31, 2026 were positively affected by $2.3$1.5 billion and $3.9 billion, respectively, in currency exchange rate fluctuations.

Membership and other income increased $0.4$0.2 billion or 27.0%11.2% and $0.6 billion or 19.0% for the three and six months ended AprilJuly 30,31, 2026, reflectingrespectively, 17.4%primarily due to strong growth in membership fee revenue with strength across membership programsincome globally. Additionally,Growth other income forin the threesix months ended AprilJuly 30,31, 2026 benefitedalso fromreflects increases in certain miscellaneous income items, none of which are individually material.

Gross profit rate increased 696 and 53 basis points for the three and six months ended AprilJuly 30,31, 2026, respectively, when compared to the same periodperiods in the previous fiscal year,year. The increases were primarily due to the Walmart U.S. segment, driven by merchandisetariff mixrefunds, shiftspartially offset by price investments and higher fuel costs within our supply chain. Gross profit rate also benefited from continued growth in higher margin businesses, including advertising, partially offset by higher fuel costs within our supply chain and increased eCommerce fulfillment costs in the Sam's Club U.S. segment.advertising.

Other gains and losses consist of certain non-operating items, such as the change in the fair value of our investments and gains or losses on business dispositions, which by their nature can fluctuate from period to period. Other gains and losses for the three and six months ended AprilJuly 30,31, 2026 consisted of net gainslosses of $0.3$1.2 billion and $0.9 billion, respectively, compared to net lossesgains of $0.6$2.7 billion and $2.1 billion for the same periodperiods in the previous fiscal year. These net gains and losses primarily consisted of changes in fair value of our equity and other investments driven by changes in their underlying stock prices.

Our effective income tax rate was 23.2%18.5% and 20.7% for the three and six months ended AprilJuly 30,31, 2026, respectively, compared to 22.6%23.3% and 23.0% for the same periodperiods in the previous fiscal year. The decreases in effective tax rate were primarily due to changes in unrecognized tax benefits. Our effective income tax rate may fluctuate as a result of various factors, including changes in our assessment of unrecognized tax benefits, valuation allowances, business operations, acquisitions, investments, entry into new businesses and geographies, intercompany transactions, changes in tax law, changes in the administrative practices, principles, and interpretations related to tax and the mix and size of earnings among our U.S. operations and international operations, which are subject to statutory rates that may be different than the U.S. statutory rate.

As a result of the factors discussed above, as well as an interest expense benefit related to changes in unrecognized tax benefits, consolidated net income decreased $0.6 billion and increased $0.9$0.2 billion for the three and six months ended AprilJuly 30,31, 2026, respectively, when compared to the same periodperiods in the previous fiscal year. Accordingly, diluted net income per common share attributable to Walmart was $0.67$0.80 and $1.46 for the three and six months ended AprilJuly 30,31, 2026, respectively, which represents a decrease of $0.08 and an increase of $0.11$0.03 when compared to the same periodperiods in the previous fiscal year.

Net sales for the Walmart U.S. segment increased $5.0$4.3 billion or 4.5%3.5% and $9.3 billion or 4.0%, for the three and six months ended AprilJuly 30,31, 2026, respectively, when compared to the same periodperiods in the previous fiscal year. The increaseincreases waswere due to comparable sales of 4.3%3.3% and 3.8% for the three and six months ended AprilJuly 30,31, 2026, respectively, driven by growth in transactions and average ticket, reflecting strength in grocerygrocery, partially offset by a decrease in health and wellness primarily due to the impact from maximum fair price regulation on certain prescription drugs, which went into effect in January 2026. Growth for the six months ended July 31, 2026 also reflects strength in general merchandise. The Walmart U.S. segment's eCommerce net sales positively contributed approximately 5.2%4.9% and 5.1% to comparable sales for the three and six months ended AprilJuly 30,31, 2026.2026, respectively. This growth reflects continued strength in customer and Walmart+ member engagement with omnichannel offerings, which was primarily driven by store-fulfilled delivery.

Membership and other income increased 45.6%15.6% and 30.4% for the three and six months ended AprilJuly 30,31, 2026, respectively, primarily driven by increases in certain miscellaneous income items, as well as double-digit percentage growth in membership fee revenue from Walmart+. Growth during the six months ended July 31, 2026 also reflects increases in certain miscellaneous items.

Gross profit rate increased 29158 and 95 basis points for the three and six months ended AprilJuly 30,31, 2026, respectively, when compared to the same periodperiods in the previous fiscal year. The increaseincreases waswere primarily driven by merchandisetariff mix shifts and growth in higher margin businesses, including advertising,refunds, partially offset by price investments and higher fuel costs within our supply chain. Gross profit rate also benefited from continued growth in higher margin businesses, including advertising.

Operating expenses as a percentage of net sales increased 5672 and 64 basis points for the three and six months ended AprilJuly 30,31, 2026, respectively, when compared to the same periodperiods in the previous fiscal year. The increase for the three months ended July 31, 2026 was primarily duedriven toby higher self-insured general liability claims expense, increased depreciation expense related to our continued capital investments,investments and higher associate healthcare benefit costs related to increased enrollment and medical cost inflation,inflation. asThe wellincrease asfor businessthe reorganizationsix charges.months ended July 31, 2026 was primarily driven by higher associate healthcare benefit costs, increased depreciation related to our capital investments and higher self-insured general liability claims expense.

As a result of the factors discussed above, operating income increased $0.2$1.4 billion and $1.6 billion for the three and six months ended AprilJuly 30,31, 2026, respectively, when compared to the same periodperiods in the previous fiscal year.

Net sales for the Walmart International segment increased $5.4$4.0 billion or 18.0%12.8% and $9.4 billion or 15.3% for the three and six months ended AprilJuly 30,31, 2026, respectively, when compared to the same periodperiods in the previous fiscal year. The increaseincreases waswere primarily due to positive comparable sales across our international markets, including strong eCommerce growth of $2.0$1.6 billion,billion and positive$3.6 billion for the three and six months ended July 31, 2026, respectively. Currency exchange rate fluctuations inpositively currencycontributed exchange$1.5 ratesbillion ofand $2.3$3.9 billion.billion for the three and six months ended July 31, 2026, respectively.

Gross profit rate wasdecreased flat15 and 8 basis points for the three and six months ended AprilJuly 30,31, 2026, respectively, when compared to the same periodperiods in the previous fiscal year. The ratedecreases benefittedwere fromprimarily due to price investments and ongoing format mix shifts, partially offset by improved eCommerce margins and business mix shifts,shifts. offsetAdditionally for the three months ended July 31, 2026, the rate was negatively impacted by ongoinga formatdiscrete mixsales-related shifts.reserve.

Operating expenses as a percentage of net sales decreased 2829 basis points for both the three and six months ended AprilJuly 30,31, 2026, when compared to the same periodperiods in the previous fiscal year,year. The decreases were primarily due to disciplined cost controls and ongoing format mix shifts, partially offset by investments in strategic growth priorities in our CanadaMexico and MexicoCanada markets.

As a result of the factors discussed above, operating income increased $0.3$0.2 billion and $0.5 billion for the three and six months ended AprilJuly 30,31, 2026, respectively, when compared to the same periodperiods in the previous fiscal year.

Net sales for the Sam's Club U.S. segment increased $2.1 billion or 8.8% and $3.4 billion or 7.5% for the three and six months ended July 31, 2026, respectively, when compared to the same periods in the previous fiscal year. The increases were primarily due to comparable sales, including fuel, of 8.6% and 7.3% for the three and six months ended July 31, 2026, respectively, with growth in transactions and unit volumes, reflecting strength in grocery and general merchandise. Additionally, higher fuel sales, driven by higher fuel prices and volumes, positively impacted comparable sales by 2.1%4.2% and 3.2% for the three and six months ended AprilJuly 30,31, 2026.2026, respectively. Sam's Club U.S. eCommerce net sales positively contributed approximately 3.1% to comparable sales for both the three and six months ended AprilJuly 30,31, 2026, reflecting continued strength in member engagement with omnichannel offerings, such as club-fulfilled delivery.

Membership and other income increased 11.0%6.0% and 8.5% for the three and six months ended AprilJuly 30,31, 2026, when compared to the same periodperiods in the previous fiscal year. The increaseincreases waswere primarily due to growth in the membership base and Plus penetration,penetration. asGrowth wellduring asthe six months ended July 31, 2026 also reflects increases in certain miscellaneous income items. EffectiveAs Maypreviously 1, 2026,reported, Sam's Club U.S. increased its annual membership feesfees, foreffective ClubMay and1, Plus2026. memberships from $50 to $60 and from $110 to $120, respectively. The fee increase will benefit membership and other income in future periods, as membershipMembership fees are deferred and recognized ratably over the one-year membership term.

Gross profit rate decreasedincreased 2645 and 11 basis points for the three and six months ended AprilJuly 30,31, 2026, respectively, when compared to the same periodperiods in the previous fiscal year. The decreaseincreases waswere primarily due to tariff refunds, partially offset by price investments and increased eCommerce shipping and fulfillment costs, driven by club-fulfilled delivery.

Operating expenses as a percentage of net sales wasdecreased flat26 and 13 basis points for the three and six months ended AprilJuly 30,31, 2026, respectively, when compared to the same periodperiods in the previous fiscal year. The ratedecreases benefittedfor fromboth the three and six months ended July 31, 2026 were primarily driven by higher fuel sales, offset by increasedcontinued coststechnology related to club-fulfillment of delivery ordersinvestments and higher associateself-insured healthcaregeneral benefitliability costsclaims related to increased enrollment and medical cost inflation.expense.

As a result of the factors discussed above, operating income increased slightly$0.2 billion for both the three and six months ended AprilJuly 30,31, 2026, when compared to the same periodperiods in the previous fiscal year.

Net cash provided by operating activities for the threesix months ended AprilJuly 30,31, 2026 decreasedincreased $0.7$1.4 billion when compared to the same period in the previous fiscal year. The decreaseincrease was primarily due to timing of inventory receipts, partially offset by timing of certain payments and an increase in cash provided by operating income.income, partially offset by timing of inventory receipts.

Cash and cash equivalents were $10.7$11.5 billion and $9.3$9.4 billion at AprilJuly 30,31, 2026 and 2025, respectively. Our working capital deficit was $26.2$26.9 billion as of AprilJuly 30,31, 2026, which increased when compared to the $22.7$21.5 billion working capital deficit as of AprilJuly 30,31, 2025. The increase in our working capital deficit was primarily driven by the timing of certain payments described above and an increase in short-term borrowings for general corporate purposes,purposes as well as the timing of certain payments described above, partially offset by antiming of inventory receipts, increase in inventories and receivables primarily related to sales growth combined withand higher cash balances. We generally operate with a working capital deficit due to our efficient use of cash in funding operations, consistent access to the capital markets and returns provided to our shareholders in the form of cash dividends and share repurchases.

As of AprilJuly 30,31, 2026 and January 31, 2026, cash and cash equivalents of $5.0 billion and $3.9 billion, respectively, may not be freely transferable to the U.S. due to local laws or other restrictions or are subject to the approval of the noncontrolling interest shareholders.

Net cash used in investing activities for the threesix months ended AprilJuly 30,31, 2026 increased $1.6$3.1 billion when compared to the same period in the previous fiscal year. The increase was primarily due to increased payments for property and equipment.equipment and change in net proceeds received from sales of certain strategic investments in the previous fiscal year.

Net Cash ProvidedUsed byin Financing Activities

Net cash providedused byin financing activities increaseddecreased $2.3$2.2 billion for the threesix months ended AprilJuly 30,31, 2026, when compared to the same period in the previous fiscal year. The increasedecrease was primarily due to higher short-term borrowings and lower share repurchases and higher short-term borrowings,repurchases, primarily offset by increased debt repayments in the current fiscal year.

In April 2026, the Company renewed and extended its existing 364-day revolving credit facility of $10.0 billion as well as its five-year credit facility of $5.0 billion. In total, we had committed lines of credit in the U.S. of $15.0 billion at AprilJuly 30,31, 2026, all undrawn.

The following table provides the changes in our long-term debt for the threesix months ended AprilJuly 30,31, 2026:

During the threesix months ended AprilJuly 30,31, 2026, our total outstanding long-term debt increased $2.6$1.8 billion, primarily due to the issuance of new long-term debt in April 2026, less current year debt repayments. Refer to Note 3 to our Condensed Consolidated Financial Statements for details.

From time to time, the Company repurchases shares of its common stock under share repurchase programs authorized by the Company's Board of Directors. Any repurchased shares are constructively retired and returned to an unissued status. All repurchases made during the threesix months ended AprilJuly 30,31, 2026 prior to February 23, 2026 were made under the program in effect at the beginning of fiscal 2027. In February 2026, the Company approved a new $30 billion share repurchase program, which beginning on February 23, 2026, replaced the previous share repurchase program. As of AprilJuly 30,31, 2026, authorization for $28.2$25.1 billion of share repurchases remained under the current share repurchase program. Any repurchased shares are constructively retired and returned to an unissued status.

The following table provides, on a settlement date basis, share repurchase information for the threesix months ended AprilJuly 30,31, 2026 and 2025:

During the threesix months ended AprilJuly 30,31, 2026, the Company repurchased $2.1$5.1 billion in shares of its common stock, a decrease of $2.5$1.1 billion as compared to the same period in the previous fiscal year. The decrease was primarily driven by opportunistic prices during the first quarter of fiscal 2026 as part of the Company's long-term strategy.

We have strong commercial paper and long-term debt ratings that have enabled and should continue to enable us to refinance our debt as it becomes due at favorable rates in capital markets. As of AprilJuly 30,31, 2026, the ratings assigned to our commercial paper and rated series of our outstanding long-term debt were as follows:

In Note 5 to our Condensed Consolidated Financial Statements, which is captioned "Contingencies" and appears in Part I of this Quarterly Report on Form 10-Q under the caption "Item 1. Financial Statements," we discuss, under the sub-caption "Opioid-Related LitigationLitigation," certain opioid-related matters and certain risks arising therefrom. In Note 5, we discuss, "Asda Equal Value Claims" the Company's indemnification obligation for the Asda Equal Value Claims matter, "Money Transfer Agent Services Matter," a government investigation by the U.S. Attorney's Office for the Middle District of Pennsylvania into the Company's consumer fraud prevention and anti-money laundering compliance related to the Company's money transfer agent services, as well as matters related to independent contractor drivers on the driver platform under "Driver Platform Matters." In Note 5, under "Mexico Antitrust Matter," we also discuss a quasi-judicial administrative process initiated by COFECE against Walmex and Walmex's related constitutional challenge. In Note 5 we also discuss a show cause noticenotices and requests issued by the Directorate of Enforcement to Flipkart regarding Foreign Direct Investment rules and regulations in India and an India Antitrust Matter. We reference various legal proceedings related to the Prescription Opiate Litigation, the DOJ Opioid Civil Litigation and False Claims Act Litigation; Asda Equal Value Claims; Money Transfer Agent Services Matter; Federal Trade Commission and State Attorneys General Driver Platform Litigation; Mexico Antitrust Matter; and an India Antitrust Matter in Part II of this Quarterly Report on Form 10-Q under the caption "Item 1. Legal Proceedings," under the caption "I. Supplemental Information." We also discuss an environmental matter with the U.S. Environmental Protection Agency in Part II of this Quarterly Report on Form 10-Q under the caption "Item 1. Legal Proceedings," under the sub-caption "II. Environmental Matters." The foregoing matters and other matters described elsewhere in this Quarterly Report on Form 10-Q represent contingent liabilities of the Company that may or may not result in the incurrence of a material liability by the Company upon their final resolution.