Walmart announced its fourth-quarter earnings for fiscal year 2025. The e-commerce giant achieved a record-breaking revenue of $680.985 billion, surpassing its previous year’s performance. This equates to an average daily income of about $1.86 billion.
Amid this financial success, how will Walmart move toward its climate and net zero goals?
Profits Soar While Sustainability Goals Stall?
Walmart posted adjusted earnings per share (EPS) of $0.66 and revenue of $180.55 billion for Q4. This exceeded analyst predictions of $0.64 EPS and $180.31 billion in revenue.
The company’s growth was significantly driven by its online business, which saw a 16% increase in sales during the 4th quarter. Despite a 4.1% rise in sales for the quarter, net profit experienced a slight decline of 4.4%, amounting to $5.254 billion.
Comparable sales for Walmart U.S. increased by 4.6%, driven by a 16% growth in global e-commerce. Additionally, the giant retailer’s advertising sector reported a robust 29% growth.
The company’s competitive pricing strategy attracted a diverse customer base. These include higher-income shoppers seeking value amid economic uncertainties.
However, the largest retailer is being careful about the next fiscal year. They expect only slight sales growth and earnings per share that could be as much as 27 cents lower than what analysts predicted. This cautious outlook stems from possible consumer reluctance and the effects of tariffs on imports from China and elsewhere.
Following the announcement, Walmart’s shares experienced a decline of up to 7.8%. Analysts worry about a potential drop in consumer spending. This concern comes from post-holiday spending trends and inflation caused by protectionist trade policies.
Walmart faces challenges, but it stays focused. It uses its size to improve online and in-store options, helping it keep its edge in retail.
Analysts are still hopeful about Walmart’s market share growth and solid business trends. They do have worries about e-commerce profits and ongoing investments. The company focuses on competitive pricing. This strategy attracts many customers and helps it thrive in an uncertain economy.
But how does the e-commerce giant advance its sustainability and climate goals? Its latest report says Walmart is lagging behind its climate targets. Let’s take a closer look at the company’s sustainability efforts.
Walmart’s Net Zero and Sustainability Initiatives
Walmart continues to show commitment to environmental impact. So, it has started many initiatives to cut greenhouse gas (GHG) emissions and boost sustainability in its operations and supply chain.
Commitment to Net Zero Emissions
In 2020, Walmart announced its ambitious goal to achieve zero emissions across its global operations by 2040. This commitment encompasses a comprehensive strategy that does not rely on carbon offsets. To reach this objective, the company has outlined several key focus areas:
- Renewable Energy Transition: Walmart aims to power 100% of its global operations with renewable energy sources by 2035. By 2024, the company stated that about 36% of its operations used renewable energy. This shows steady progress toward its goal.
- Fleet Electrification: Transportation is a significant contributor to GHG emissions. Walmart has set a target to electrify its entire vehicle fleet, including long-haul trucks, by 2040. This initiative is expected to substantially decrease emissions associated with product distribution and logistics.
RELATED: Amazon’s $1 Billion Move Towards Net Zero: Logistics Electrification Across Europe
Project Gigaton: Supply Chain Emission Reductions
Walmart knows that much of its carbon footprint comes from its supply chain. So, in 2017, it started Project Gigaton. This program seeks to engage suppliers in the collective goal of reducing or avoiding 1 billion metric tons (a gigaton) of GHG emissions by 2030. The initiative focuses on several key areas:
- Energy Efficiency: Encouraging suppliers to adopt energy-efficient practices and technologies to minimize emissions.
- Sustainable Agriculture: Promoting farming practices that reduce environmental impact and enhance carbon sequestration.
- Waste Reduction: Use strategies to cut waste during the product lifecycle. This starts from manufacturing and goes to end-of-life disposal.
In February 2024, Walmart said it met its Project Gigaton goal 6 years early. It cut, avoided, or captured one billion metric tons of CO₂e emissions from its supply chain. This milestone underscores the effectiveness of collaborative efforts in driving substantial environmental impact.
As of the latest reports, over 3,100 suppliers have now joined the project. They are helping to reduce emissions significantly.
By 2023, Walmart reduced operational emissions by 19.3% from its 2015 baseline, with a 45% decline in carbon intensity. However, a 3.9% rise in annual emissions that year has led the company to delay its predetermined reduction targets.
Other major sustainability efforts of Walmart include:
Circular Economy
Walmart wants to promote a circular economy. They aim to cut waste and boost the reuse and recycling of materials. The company has set a goal to achieve zero waste in its operations in key markets, including the U.S., by 2025. Initiatives include:
- optimizing packaging,
- increasing the recyclability of private-brand products, and
- collaborating with suppliers to minimize waste throughout the product lifecycle.
Sustainable Product Sourcing
Ensuring that products are sourced responsibly is integral to Walmart’s sustainability efforts. The company aims to source key commodities by 2025. These include palm oil, beef, soy, pulp, paper, and timber. All must be free from deforestation. This means working together with suppliers.
The retailer established clear sourcing standards. They also support sustainable farming and forestry efforts.
Collaborative Efforts and Advocacy
Walmart understands that addressing climate change requires collective action. The company works with different coalitions and partners to promote sustainability in retail and beyond.
Walmart wants to make a bigger impact. It does this by sharing best practices, supporting policies, and engaging stakeholders.
Challenges and Future Outlook: Balancing Profit Margins with Green Initiatives
Walmart has faced challenges in reaching its interim climate and net zero goals, despite its ambitious plans. In December 2024, the company said it won’t meet its goals.
- It expects to fall short of cutting operational GHG emissions by 35% by 2025 and 65% by 2030.
Several factors cause this shortfall. First, some low-carbon technologies are not available. Others are too expensive, especially in refrigeration and transportation. Second, there are limits to their clean energy infrastructure and policies.
Walmart tackles these challenges by investing in new ideas. They also work with industry partners, policymakers, and tech developers. The company works hard to speed up the development and use of sustainable technologies. It also wants to improve energy efficiency and support policies that help move us toward a low-carbon economy.
In summary, while Walmart has made significant strides in its financial performance, the path to achieving its long-term net zero goals requires more effort, innovation, and collaboration. The company takes a proactive stance and values transparency, making it a leader in corporate sustainability. It works hard to grow its business while also being responsible for its environmental footprint.
