Greetings and welcome to the Walmart Third Quarter Fiscal Year 2025 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the call over to your host, Steph Wissink, Senior Vice President of Investor Relations. Thank you. You may begin. Thank you. Welcome, everyone. We appreciate you joining us and your interest in Walmart. Joining me today from our home office in Bentonville are Walmart CEO Doug McMillon and CFO John David Rainey. Doug and John David will first share their views on the quarter, and then we'll open up the line for your questions. During the question-and-answer portion, we will be joined by our segment CEOs, John Furner from Walmart U.S., Kath McLay from Walmart International, and Chris Nicholas from Sam's Club. For additional detail on our results, including highlights by segment, please see our earnings release and accompanying presentation on our website. We will make every effort to answer as many of your questions as we can in the hour we have scheduled for this call. As a courtesy to others, please limit yourself to one question. Today's call is being recorded, and management may make forward-looking statements. These statements are subject to risks and uncertainties that could cause actual results to differ materially from these statements. These risks and uncertainties include, but are not limited to, the factors identified in our filings with the SEC. Please review our press release and accompanying slide presentation for a cautionary statement regarding forward-looking statements, as well as our entire safe harbor and non-GAAP reconciliations on our website at stock.walmart.com. Doug, that concludes my intro. We're ready to begin. Good morning and thanks for joining us. Our associates delivered another strong quarter, continuing our momentum. They're working hard to save our customers and members time and money while simultaneously transforming our business for the future. For the quarter, sales grew 6.1% in constant currency, and profit was up 9.8%. Globally, we drove strong growth in e-commerce, up 27%. Advertising grew 28%, and membership income was up 22%. This helped us grow profits faster than sales, even as we work to help lower prices and invest in our associates. The rapid growth from these newer businesses is helping us strengthen our business model. All three segments of our business performed well. Sales for Walmart International grew 12.4% in constant currency. Comp sales for Sam's Club U.S. were 7%, and Walmart U.S. delivered comp sales of 5.3%. Transaction counts and unit volumes were positive across each segment, and we continued to gain market share in the U.S., both in grocery and General Merchandise. Households earning more than $100,000 made up 75% of our share gains. In the U.S., in-store volumes grew, curbside pickup grew faster, and delivery sales grew even faster than that. Becoming more convenient for our customers and members is helping drive our growth. We had almost no like-for-like inflation in the U.S. this quarter. It was nice to see General Merchandise grow low single digits in the U.S., even as prices are deflated by over 4%. We currently have about 6,000 rollbacks in Walmart U.S. across all categories. We're feeling some margin pressure from growth in GLP-1 drugs, so we're pleased to see General Merchandise sales be positive. Across the company, inventory is in very good shape. The unique characteristics of this quarter included a U.S. port strike, two large hurricanes, and the flooding they caused. Our team did a really nice job preparing before those events, and they worked hard to aid recovery after the storms. The team that comes together from across the company to form our emergency operations center is impressive. They coordinate closely with federal, state, and local leaders. They make sure our associates are accounted for and safe, and we set up distribution points at stores in the affected areas where we serve hot meals, giveaway supplies, offer showers, laundry services, and phone charging. Through Walmart and the Walmart Foundation, we made a $16 million commitment, which we've delivered on. This includes 178 truckloads of needed supplies and cash grants totaling nearly $10 million to support local needs. Our truck drivers and other associates helped facilitate or serve 544,000 meals in the affected areas, supported by our nonprofit partners. Our customers and members contributed an additional $14.5 million from in-store and online campaigns. I got a chance to see our associates in action in Georgia and here in Bentonville, and I couldn't be prouder of them all. In total, the storms and the port strike lifted our sales growth by a small amount and negatively affected operating income growth by a larger amount. The takeaway should be that we delivered on our financial framework despite the noise from these events. This was clearly a strong quarter, and the changes we've been working on for years are continuing to bear fruit. We're well-positioned to serve people how they want to be served, whether that's coming into a store, picking up an order, or having it delivered. Our team has changed, developed new capabilities, and learned how to work in new ways. We build new tech more effectively than we used to, and we're doing it with more speed. This is a more customer and member-centric organization. I got to attend our Sam's Club grand opening in Grapevine, Texas, a few weeks ago, and it was exciting to be there. We made quite a few changes to the design of this club. We have an expanded area for curbside pickup and delivery orders, new category adjacencies with consumables near the pickup and delivery staging area, and a stronger General Merchandise presentation that has improved the sales mix of those categories. Boldly, our Sam's team also eliminated traditional checkouts, so our members can use Scan & Go and the new computer vision exit technology to exit the club faster. Just imagine a 150,000-sq-ft Sam's Club with no traditional checkouts. The week after that grand opening in Texas, I made a trip to China. The week before I arrived, we opened our 50th Sam's Club there with 60,000 members. All 50 clubs are performing well, and we have more to come. About half our sales in China are digital, thanks in part to our network of over 350 club distribution points, which provide one-hour delivery service to members, extending the reach of our traditional clubs. We've learned a lot from operating around the world, and we continue to learn from places like China, where social commerce, including live streaming, are growing quickly, and places like India, where financial services have digitized at scale. Last week, I got to spend a couple of days with our team in Mexico, where our team is driving innovation in lots of areas, including with our cellular service, Bait, our financial services business, Cashi, and with healthcare services, where we've helped over 400,000 customers visit a doctor in our in-store healthcare clinics. As in other markets, our Walmart team is growing e-commerce, adding newer businesses, including marketplace and advertising, and becoming an omnichannel retailer. As I mentioned last quarter, we're seeing early tangible results from the deployment of generative AI. I'm a little hesitant to talk about AI because I know someone will hear this in the months and years to come and chuckle about how old-school it sounds, given how fast things are changing. But it's important to convey that we're learning and applying generative AI, AI, and machine learning to solve the practical opportunities right in front of us. Our data sets are valuable, and we're learning to put them to work to improve the customer and member experience and assist our associates as they do their daily work. I'll build on the example I shared last quarter about how GenAI has helped us improve our product catalog by mentioning the personal shopping assistant we're building. We've had it in beta form for five months, and it continues to improve. I'm excited about how it will improve the customer experience in the months and years to come, enabling us to provide a better experience than the one that starts by typing into a search bar and getting a list of results to choose from. We're racing to improve all the things that people love about shopping and remove or diminish all the things they don't. In addition to the customer-facing work, 15 months ago, we deployed a GenAI tool to all of our U.S. home office associates. It's called My Assistant. We've expanded access to home office associates in 13 additional countries, and we continue to see engagement grow. It provides our associates a place to access knowledge and time-saving actions in a secure environment. Since launch, 50,000 associates have used My Assistant to ask 1.5 million questions. Our leaders can get insights into people-related metrics such as hiring and retention, and associates can get answers to common policy questions like, "How do I order my discount card?" through a conversational experience. We'll continue to build on these use cases to enable more productivity and help identify the next best task for our associates in stores and clubs. Just as we're enhancing the customer experience with GenAI, we're working to remove friction for our associates so they can do high-value work that they enjoy, like serving our customers and being merchants. I continue to be excited about how our associates are learning and changing the way they think and work. With that, I'll wrap up and turn it over to our CFO, whose Baylor Bears beat my Arkansas Razorbacks in basketball recently. We'll see you in March, John Rainey. We look forward to that, Doug. I hope the Razorbacks have a good season, just not as good as the Bears. I want to start by thanking our team for delivering another strong quarter. We're encouraged by the steady momentum building across the business. Importantly, the drivers of our outperformance are similar to the past several quarters, with customers and members continuing to respond to our value proposition as we provide lower prices and greater levels of convenience. We're broadening our assortment, improving customer experience, and earning their trust while seeing share gains as a result. We're also realizing benefits from the investments we've made in our core omni-retail business and seeing improved profitability with newer businesses. We're executing on our strategy, and the business model is delivering as it's designed to do, with operating income growing faster than sales, and yet there is much more opportunity ahead. As Doug noted, the hurricanes that impacted the southeastern United States resulted in unanticipated expenses during the quarter. I'm incredibly proud of how our team responded to support the communities that we serve, using our fleet of semi-trucks, supply chain, logistics capabilities, product inventory, and financial resources to support the restoration effort. At the peak of the storms, we had about 400 stores, clubs, and DCs closed. We're pleased that all of our associates in the affected areas remain safe, and we continue to support them during this disruptive period. We've since reopened all of our supercenters except for two that were extensively damaged, and we're in the process of restoring these stores to serve customers again as soon as possible. Now let me review the highlights of our financial results. Q3 sales, operating income, and EPS all exceeded the top end of our guided ranges. Enterprise net sales growth was over 6% on a constant currency basis, with all three operating segments outperforming our expectations, aided by strong e-commerce growth. Walmart U.S. comp sales increased 5.3%, including e-commerce sales growth of 22%. Growth in customer transactions and units across stores and e-commerce remained strong. Store-fulfilled delivery increased nearly 50% and surpassed $2.5 billion monthly run rate. We've now had 12 consecutive months of deliveries above $2 billion. Food categories were especially strong this quarter, with unit volumes growing by the highest level in four years. We also generated mid-teens growth in Health and Wellness due largely to branded pharmacy scripts, including GLP-1. GLP-1 sales contributed about one point to the segment comp while continuing to create mixed pressures in gross profit. We're encouraged by the improvement in General Merchandise, where we had low single-digit comp sales growth, including strength in home, hard lines, and toys. U.S. customers remain resilient, with behaviors largely consistent over the past four to six quarters. They continue to seek value to maximize their budgets while also choosing convenient options to save time. Our efforts to bring down pricing have helped as total like-for-like inflation has remained close to flat for the past four quarters, with Q3 General Merchandise and consumables deflationary and food inflationary in the low single digits. We're seeing higher engagement across income cohorts, with upper-income households continuing to account for the majority of our share gains. Our international business had another strong quarter, with constant currency sales growth of 12.4%, reflecting strength in Flipkart, Walmart, and China. We saw positive unit growth across markets, with sales strength in both General Merchandise and food and consumables. E-commerce sales increased 43%, and penetration grew across all markets, with speed of delivery becoming increasingly important to customers. In the last 12 months, International delivered over 2.1 billion items same day or next day, with about 45% of those delivered in under one hour. Flipkart's BBD, or Big Billion Day sales event, was up double digits in both top line and customer growth. The timing of the event was earlier than last year, benefiting our year-over-year sales comparisons in Q3, with a corresponding headwind expected in Q4. Walmart's growth outpaced the comparable market for the sixth consecutive quarter, and our business in China continued to grow double digits with strength in Sam's Club and e-commerce. PhonePe also had a good quarter, with monthly transactions surpassing 8.7 billion and total annualized payment volume of approximately $1.6 trillion. Sam's Club U.S. comp sales ex-fuel increased 7%, including e-commerce growth of 26%, with increased transactions and unit volumes accounting for almost the entirety of the comp growth. In response to member feedback, Sam's rolled out new perks in August, like express delivery and the elimination of curbside pickup fees for Club tier members, which helped e-commerce growth. Since that launch, e-commerce growth has increased by more than 700 basis points versus our trends in the first half of the year, with club-fulfilled delivery more than doubling in that period. The convenience Sam's provides both inside the club and via e-commerce is a differentiator in the warehouse club channel. Scan & Go penetration of sales increased more than 250 basis points, and the nearly completed rollout of our Just Go exit technology across all 600 clubs is enabling about 70% of members to exit without a check. Members love it, with member satisfaction scores on exit now close to 90. Our frictionless approach to serving members by leveraging technology is on full display at our new club opened in Grapevine, Texas, the first of 30 new clubs we expect to open in the coming years. If you're in the area, we'd encourage you to check it out. From a margin standpoint, consolidated gross margin expanded 21 basis points, led by Walmart U.S., with international results pressured by the timing of Flipkart's BBD sales event. In the U.S., improved margins reflected strong inventory management again this quarter, with a 0.6% decline on more than 5% sales growth, as well as a lower level of markdowns that has allowed us to manage pricing aligned to competitive price caps. Providing everyday low prices for our customers and members remains a priority, and we continue to lower prices in the U.S. across our assortment of national brands and private brands. During the quarter, we had price rollbacks on approximately 6,000 items across our assortment, including around 3,000 items in grocery, and have converted nearly 2,000 price rollbacks over the past year to long-term price reductions. We're pleased with how customers and members are responding to our strong value proposition. As our business model evolves, it's encouraging to see our margins improve from a diverse set of offerings. Global e-commerce losses continued to narrow in Q3, most notably in Walmart U.S. While improved business mix helped, we're seeing good progress in core e-commerce margins. There are a few key factors driving this improvement: delivery densification, increased penetration of paid expedited delivery orders, and the automation of our supply chain. As we scale our store-fulfilled delivery business and expand our catchment areas, we've seen significant improvement in batch density, with orders per delivery up 20%. In addition, the popularity of expedited delivery has resulted in more than 30% of orders coming from customers and members that elected to pay a convenience fee to receive their delivery in less than one hour or less than three hours, and lastly, we continue to make progress in the automation of our supply chain, as now more than 50% of our fulfillment center volume is automated, which is twice as much at this point last year. This has the obvious benefit of lowering the per-unit cost of delivery. These factors contributed to the third consecutive quarter of approximately 40% reduction in U.S. net delivery cost per order. Importantly, while we drive greater efficiency, we're enhancing service levels, with customer NPS for delivery reaching all-time highs this quarter. We're also continuing to reshape our profit composition and business mix as we scale growth drivers such as advertising, membership, marketplace and fulfillment, and data analytics and insights. Our global advertising business increased 28% in Q3, driven by 50% growth in international, led by Flipkart, which was aided by the BBD event, as well as another strong quarter from Walmart Connect in the U.S., which grew 26%. We're building a highly unique retail media platform and have been encouraged by ongoing tests showing customer receptivity to growth in digital ads, especially where ads help customers discover relevant items that are trending, navigate and compare choices, and enjoy Walmart's everyday low prices. We're also pleased with the trends in our membership programs. In the U.S., Sam's Club continued to grow membership count and increase its penetration of Plus members, resulting in 15% membership income growth, while Walmart+ membership income grew double digits again this quarter. Within International, membership income in China from our Sam's Club business grew more than 30% as member counts continue to increase. For marketplace and Walmart Fulfillment Services, in the U.S., marketplace grew 42% in Q3, and we've now seen more than 30% growth in each of the past five quarters. The number of sellers on the platform continued to grow double digits, and SKU count is approaching 700 million items. With a broader assortment of the brands and items customers want, marketplace sales in beauty, toys, hard lines, and home all grew more than 20%. We continue to leverage our next-generation supply chain and technology to provide fulfillment for sellers at some of the lowest rates in the industry. As a result, more sellers are using our marketplace fulfillment services, with WFS sales penetration reaching record highs at more than 40%. Outside of the U.S., we're seeing similar encouraging trends. For example, our marketplaces in Mexico, Canada, and Chile combined increased items by 20% versus last year. In Mexico, the number of items delivered through WFS grew over 50%, and during Flipkart's Big Billion Days event, we experienced same-day delivery growth, two and a half times higher than last year. This quarter, Flipkart also launched its quick commerce service called Flipkart Minutes in a number of cities, offering delivery in under 15 minutes for a variety of items, including groceries and electronics. Within data analytics and insights, Walmart Data Ventures continues to grow rapidly, with net sales up double digits. Our client base has more than doubled over the past year, and we're excited about continuing to broaden our reach to new markets by launching the platform in Canada this month. As a reminder, the margin gains we've reported this year in the U.S. have been burdened by meaningful product headwinds from the outsized sales growth in Health and Wellness relative to General Merchandise. Our plan calls for General Merchandise to improve in future quarters, but to continue to underperform Health and Wellness and Grocery until we return to a more normalized purchasing cycle across GM categories. We remain focused on building out our marketplace assortment and emphasizing early emergent categories like apparel, home decor, and automotive supplies. We're continuing to optimize our business to deliver greater efficiency, and we're committed to balancing ongoing investments with improved returns for customers, associates, and shareholders. Our evolving business model, with more diversified and durable sources of profit, has provided the ability to fund investments while also delivering on our financial framework of operating income growing faster than sales. Price gaps remain healthy, and we continue to advocate on behalf of customers for lower prices. Wrapping up Q3 results, consolidated operating income grew 9.8% in constant currency, and Adjusted EPS increased nearly 14% to $0.58 per share. Now, turning to guidance. We are raising our full-year guidance to reflect strong third-quarter results. On a constant currency basis, we now expect full-year sales growth of 4.8%-5.1% and operating income growth of 8.5%-9.25% versus prior guidance of growth of 3.75%-4.75% and 6.5%-8%, respectively. Compared to our guidance that we provided at the start of the year, we now expect operating income to grow nearly 400 basis points more at the midpoint. Adjusted EPS is expected to be between $2.42 and $2.47 versus prior guidance of $2.35 - $2.43. This full-year guidance implies fourth-quarter constant currency growth in sales of around 3%-4% and operating income around 5%-7.5%. This guidance is slightly above our prior implied Q4 range and contemplates a series of wage investments that Sam's Club announced on September 17th to be effective in Q4. Recall that we guide sales and operating income growth on a constant currency basis. Currency fluctuations impacted the business negatively in Q3 after being a tailwind in Q1 and neutral in Q2. In Q3, currency pressured reported sales and operating income growth by about 70 basis points and 160 basis points, respectively. If rates stay where they are currently, we would expect a headwind to Q4 reported sales and operating income growth of approximately 100 basis points and 200 basis points, respectively. In closing, while we still have one more quarter to go before we close out this year, we're really encouraged by our operational and financial performance. We have a lot of conviction in our strategy, and the leaders sitting around the table with me today, along with our team of over two million associates around the world, are executing on it. Hopefully, you share my sentiment and are as excited as we are to see what else is to come. We appreciate your interest in Walmart and are now ready to take your questions. Thank you. If you'd like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the Star keys. As a reminder, we ask that you each keep to one question. Thank you. Our first question comes from the line of Kate McShane with Goldman Sachs. Please proceed with your question. Hi, good morning. Thank you for taking our question. We wanted to focus our question today on General Merchandise and gross margins. While General Merchandise inflected positive in the quarter, it still seems like mix is a headwind based on everything you walked through today. Do you have a view on when this gets more balanced? And if we were to see a more balanced growth rate in general merch versus consumables and the growth of the alternative revenue businesses, what could gross margin expansion look like? Hey, Kate, this is Doug. As it relates to General Merchandise, I'll go first and then ask all three of the segment leaders to speak. We love General Merchandise. First-party, being a first-party merchant, is something that we obviously grew up doing, and when you go into our stores and clubs right now, the seasonal impact of GM is exciting and energizing, and so this is something that we're passionate about, and in today's world, we can grow first-party General Merchandise in stores, in clubs, plus through e-commerce with both pickup and delivery and the expansion of the marketplace. So I think we've got a lot of opportunity, kind of big picture from a GM point of view. John, why don't you go first, and then Chris and Kath can chime in. Sure. Good morning, Kate. Thanks for the question. As Doug said, we're excited about the season. We're excited about seasonal merchandising. I've been in stores just the last couple of months in Utah, California, last week Philadelphia, Tennessee, the list goes on and on. And the stores are ready. They're really set for the season. We had a good back-to-school. We had a good Halloween. And it's important to string these holidays together. So we go into the season with momentum. We're excited about that, and we think we have a great plan for the season. It's early November, so the team will be working on consistent execution the next couple of months to deliver the best quarter we can for our customers. As we said, General Merchandise has improved. We are still experiencing some deflation in General Merchandise. This is in the low- to mid-single-digits range. That hasn't changed for some time, but we are positive in comp due to growth in units, primarily coming out of, as we said earlier, home, toys, some of our hard lines categories. We're seeing some real bright spots as well in the marketplace with fashion and apparel. Really excited about the mix. So we have a lot of ways that we can deliver to the customers, whether it's in the store, which really excited, again, as I said, about the stores being set seasonally, and with our e-commerce business growing at 22% in the quarter. That puts us in a spot with some momentum as we enter the fourth quarter. Maybe Chris, go to you at Sam's. Yeah, thanks, John. I mean, just a lot of similarity there with us. We love General Merchandise. We get very excited about items. And if you think about the way that we've constructed all of our strategic priorities, this is not just a consumables and food game. It's definitely a GM game. If you think about increasing digital engagement, the growth in e-commerce, that helps people see the great items we've got. Then investing in the value proposition, we're investing in a Grapevine. And Doug talked about it in his opening remarks. We've put a lot of effort into how we merchandise both the items you can buy in club, but also the items that you can buy online in this online to offline connectivity. It's really powerful, and we're seeing significant increases in the participation of General Merchandise in that club, which I think is the best articulation of our strategy physically that we have today. There's a couple of other things I'd say. From a comp point of view, we're really happy to see the second quarter of positive comps on GM. But units are still moving ahead of comps, so there's still good value out there. And similar to John, like in-home tech, toys, seasonal decor, all doing really well. And back to college and Halloween, we're also really strong, so we see that momentum continuing. Yeah, and I say from an international perspective, we saw strong growth in GM in Mexico, India, and China. And not surprisingly, in those markets, too, convenience is really important. And so as we kind of are growing our strength in delivery from a same-day and also within the hour, we're seeing the GM growth continue to kind of correlate with that convenience play. I think to drive GM growth over the next few years, e-commerce becomes crucial. Obviously, we've seen good growth there recently, but we've got a lot more opportunity, and this week, when we were in Mexico last week, we saw a pop-up toy shop outside of one of our stores that is just dominant in the toy category. It looks gorgeous, fun to shop. Kids love it. We just have such an opportunity in the physical world as well as in the digital world to create excitement with General Merchandise. Thank you. Our next question comes from the line of Michael Lasser with UBS. Please proceed with your question. Good morning. Thank you so much for taking my question. What is Walmart finding out about its ability to drive steady growth in the core business while reinvesting back in areas like price and wages to lay the foundation for the future? And as the company generates more evidence of the growth of the emerging alternative revenue streams, does it make sense to invest even more in these areas, or are there diminishing returns such that the overall enterprise-wide profit growth can accelerate next year and beyond, even as you make sizable investments back in the business? Thank you so much. Yeah, thanks, Michael. This is a real-time conversation that we have all the time. Are we investing the right amount back? You called out prices and wages. I think those are the two areas that would come to the top of our list, too. We think we are investing the right amounts, obviously, but it is a fluid situation. We watch price gaps. We watch what's happening in the employment market and have freedom now to be able to make different investments if we want to. So I think from a kind of an income statement point of view, I feel like we're being appropriately aggressive. And on the capital side, you know that we've made some significant decisions over the last few years to invest in automation in the supply chain, for example. But we're also being, I think, very aggressive as it relates to store and club remodels. So I feel like on the capital side, we're also being aggressive. And as we do that, because of the way that we've set ourselves up, we can grow profit faster than sales and do those things at the same time. It's just a matter of degree, and we will manage that as we go from week to week. Yeah, Michael, I would add to Doug's point that we feel like we're striking the right balance between profit expansion and investment in the business. We're all very focused on making sure that we are healthy for the next generation. We certainly provide an outlook over the next three to five years, but we want to continue to have the same type of financial performance after that. And that requires a level of investment in the business. And as Doug said, we feel like we're striking that balance appropriately. In terms of your part of the question about our ability to maybe accelerate profits into the future, look, we're comfortable with the outlook that we provided where we said that the way to think about our financial architecture over the next several years is that operating income will grow faster than sales, and sales should, on average, be about 4%. Some years will be a little better. Some years may be a little bit worse. We've had two years now since we provided that outlook. And if you look at our performance last year and our performance year to date, along with our guidance this year, that would suggest that on the top line, we've grown about 5% and grown profits about 10%. We're really pleased about that. But that is not a matter of us being overly conservative or conservative or anything like that. Excuse me, it's really a matter of execution by the team sitting around this table. With anything that we do, with any strategy that we have, there's always going to be things where areas where you overperform and underperform. But what you've seen is this team has done a really good job at executing on the basics and also our newer, faster-growing businesses. And so that's reflected in our financial performance. And if we execute better into the future, yeah, perhaps profits could grow faster. But the financial architecture that we've laid out is still what we believe today. Thank you. Our next question comes from the line of Simeon Gutman with Morgan Stanley. Please proceed with your question. Good morning. Hi, everyone. I wanted to talk about the top line, which it looks like it accelerated Q3 versus Q2, the underlying run rate. There were some storms, and I know we've mentioned port strikes. Can you talk about the underlying inflection you're seeing? What do we attribute it to? I don't know if it's merchandising, marketplace, membership, all the above. And have we inflected? Does it feel like we've inflected to a higher growth rate? Thank you. To me, it feels like it's pretty consistent. If you look at what happened in the first three quarters and the underlying rate, and then you look at what happened in this most recent quarter with the storms, things did increase a bit, but I still feel like we're kind of running the same level of momentum and the same economy. The fourth quarter will be fun to watch. The calendar's not our favorite with fewer days between Thanksgiving and Christmas, and I suspect when all that's said and done, it'll be similar to the kind of momentum that we've seen in the first three quarters. Yeah, Simeon, I'd add that it does feel very consistent to us. The one exception to that is maybe the timing of the Big Billion Days event. As you know, that can fall into the third quarter some years, fourth quarter other years, goes back and forth. Because of the way it fell this year, it added about 60 basis points of growth to the top line for us in 3Q. It also will work against us in 4Q. But other than that, which is just a timing element, the business is performing very consistently, as Doug said. Thank you. Our next question comes from the line of Christopher Horvers with JP Morgan. Please proceed with your question. Thanks. Good morning, everybody. Can you speak to the changes in the 4Q operating income guide relative to where you started the year FX change? To what extent did you change the top line outlook overall in the U.S.? Then you called out Sam's wage investment, but was there any changes in your expectation around gross margin given what you're seeing in the alternative profit pools? And 4Q's a big spike in terms of volume, so could that tilt the U.S. e-commerce business to profitability? Thank you. I'll address this, and others may want to join in. Chris, the way to probably characterize this, if you look at our guidance last quarter versus what's implied this quarter, there's a modest improvement in 4Q performance. There's not been a lot of change before that in terms of our outlook for 4Q. The business has been performing, as we've said, pretty consistent. In terms of GM, maybe one thing that has improved and been a little bit better than what we expected at the beginning of the year, and by GM, I'm talking gross margin, is shrink. Shrink has performed a little bit better in the U.S. and Sam segment for the first part of the year here. But other than that, the business is continuing to perform very consistently with prior quarters. Some of the more digital businesses, the newer businesses that we have, did inflect a little bit higher in 3Q. I think, also keep in mind, that that's a function of the movement of Big Billion Days that I just mentioned. But if you just go down the list, you look at, as an enterprise, 28% advertising growth, 42% marketplace growth, 22% membership income growth. We are executing. Our value proposition is resonating with customers, and that's why you're seeing us gain share. As it relates to profitability in e-commerce, we don't think we should race to it. This is a long-term game. The 1P, 3P mix is one dimension to manage, for example. If we should carry more first-party items and that somehow delays crossing a threshold of profitability, we're good with that because that's what customers want. That's what'll drive growth. If investments in delivery speed cause us to reach profitability a little later, that's fine, too. We want to deliver faster. I think we're very confident that we're going to make money in e-commerce. Whether that happens today, tomorrow, or a week from now, or a month from now, a quarter from now, I don't really care. The total works, and we've got a great opportunity to grow our e-commerce business. So I'm leaning long-term, and at some point, we'll tell you guys, "We made money in e-commerce," and then just move on and not have that conversation anymore. And as we've said several times, when you look at the shape of the new income statement and you split it between the original income statement that looks like a store P&L and the newer income statement that's got membership, advertising, fulfillment services, data monetization, and maybe some other things in it, it's more profitable. It just took a period of investment for us to get there. So again, we'll grow profit faster than sales. E-commerce will be part of the mix. Omni is our life, which we love. We think it's an advantage position. And we look forward to someday telling you that we made money in e-commerce globally, as it obviously varies by country as well. Thank you. Our next question comes from the line of Robbie Ohmes with Bank of America. Please proceed with your question. Oh, good morning. Thanks for taking my question. Doug, this may be for you. I get a lot of questions on the share gains with upper-income consumers you guys keep talking about. I was hoping you could sort of talk about it across three dimensions: Grocery versus General Merchandise with that upper-income consumer, price driving that versus convenience with that consumer, and then sort of stores versus this huge marketplace growth in terms of driving the upper-income consumer. Yeah, Robbie, I'll go first, but I'll invite John or others to chime in here, too. It isn't all of the above answer. We want to sell Grocery and GM. And if you go through and look at by category, by income level, it kind of plays out the same way General Merchandise does in that people come to us to shop as a primary destination in many instances, and then they give us feedback across categories. And if you look at our offer in food and consumables, our shares are pretty high and consistent relative to some of the things we see in General Merchandise. So over the years, we had a really strong market share in categories like toys, bicycles, but we had a lower market share in a lot of the fashion categories. That's basically just the customer telling us over the years, "I'd rather buy my apparel somewhere else." In an omni world, we have an opportunity with brands. We have an opportunity with presentation to increase the amount of market share we have in some of those categories where we should have had a higher share all along. That e-commerce opportunity is kind of bearing out as we grow our assortment. We're able to appeal to more people and appeal to higher income levels. When I think about it from a category point of view, the themes look the same to me. We have more opportunity in fashion areas than we do in basic areas, and that's always been true. As it relates to price versus convenience, everybody wants to save money, and everybody wants to save time, but it's a continuum. And those that have more discretionary income and want to save time are liking what we're doing with both pickup and delivery. And I think that's one of the things that makes this moment in time different. We do get the question from time to time about whether this is sustainable. I look at what's happened with Walmart+ and the relationship you get through a membership, what's happened with our remodels, what's happened with convenience, and it gives me more optimism that this is something that's going to last a long time, and it was a different inflection point. Did I leave anything, John, for you to add? Right on. I'll just add a couple of things to that, Doug. I think you covered a lot of it. But Robbie, we do get the question from time to time, and we talk about the different ways that we can serve consumers and how that's different from, say, a decade ago or even five years ago. As we've become omni, we have the ability to sell customers in the store, at the curb, deliver to their home, and we can do that whenever they want and in many cases, however they want. I mean, you heard earlier the number of orders that are sub-three hours, and people are prioritizing time and price. So one of your questions is, it's not an or. We want to be a great price, and we want to be convenient, and we can do both at the same time. The expansion in delivery catchments, the expansion with delivery density, and the hours of operation have helped us lower our costs, which enable us to serve customers more flexibly. So we can do both of those at the same time. In categories like grocery, yes, price obviously matters, and so does quality. We do see, and as we noted earlier, a large percentage of our market share gains came from higher-income customers. That has been happening for several quarters. And we see categories like gluten-free and dry grocery or grass-fed beef, organic produce, where our share in pickup and delivery is much higher, and the mix is higher than in-store. So we can be a great opening price point value in the store, and we can sell high quality, and we can deliver it the way that the customers want. And then the last thing is, as Doug did mention, this expansion in e-commerce. Congrats to the team for another quarter with momentum at 22% growth. But leading that growth is our marketplace team and our marketplace business, which just tells you that our customers are looking for more of an assortment than they've had in the years prior to this one from Walmart. And we're seeing bright spots in apparel, in toys, in healthy food. So it's across the board. We have a lot of work left to do. Our assortment is growing. We think that will continue to happen over the next couple of years, but it's great to see the momentum across so many channels. Maybe just to push in from Sam's point of view, you know, while we serve all income cohorts, we do definitely skew higher than the core of Walmart. And what I would say is that they love price more than anybody. Price is a core competitive advantage of ours. But great items and great prices, we think, isn't enough. And so you're seeing an acceleration in all of the metrics in Sam's because we're also leaning into experience, and a big part of that is convenience. And we're really excited to see the impact of that. Thank you. Our next question comes from the line of Krisztina Katai with Deutsche Bank. Please proceed with your question. Hi, good morning, Doug and John David. I wanted to dig into the strength of e-commerce a little bit. I was curious if you could talk about what you think is a sustainable level of growth on a go-forward basis. Clearly, it's a much larger business, but you have a lot more that are driving it as well, whether we think about marketplace and membership. Just how do you see the rapid expansion of marketplace sellers and SKUs contribute to both e-commerce growth and as we think about improving the profitability over the next several quarters? And as part of that, can you talk about General Merchandise performance, what you saw both in stores and in the marketplace? And then just from an assortment perspective, as we think about newness and innovation that you called out, just what specifically are you excited most about holiday? Thank you. Is that all, Krisztina? I'm excited about this year, not only the great items we have, but the convenience that we're going to provide, and I think you could just take our e-commerce growth rate over the last, I don't know, eight quarters and look at the trend line, and you can expect that we're going to continue investing to create a better customer experience to result in more growth. We have a relatively low market share in e-commerce versus brick and mortar, and that's our opportunity, and I think all the investments we're putting in place, including supply chain automation, are aimed at capturing that opportunity. There's such a nice connection between these businesses. As you grow e-commerce first-party, for example, you get the opportunity to grow third-party. As you grow first and third-party e-commerce businesses, you get an opportunity to sell an ad, to sell a membership for delivery, to get additional data. And it all does work together in a mutually reinforcing way. And so, as I mentioned just a minute ago, that's nice for us in that it mixes us up. It not only gives us top-line growth, but it gives us bottom-line growth. I'll just wrap up by saying it is still an item business, and it's still fun. We talk these days a lot about our technology and our investments, but when it gets to this time of year in particular, the hot toy is going to be fun to talk about. The Thanksgiving meal that's a lower price this year than it was a year ago is fun to be part of. We're sitting in a room today that's got a bit of Christmas feel to it, decor-wise, and it's exciting to be in this part of the year. Thank you. Our next question comes from the line of Scot Ciccarelli with Truist Securities. Please proceed with your question. Good morning, guys. So I think you've given us some numbers previously on how much of your EBIT growth was coming from your ancillary revenue streams. So the questions are, do you have a number for that this quarter? And then is it possible to rank the drivers between advertising, membership, 3P, etc.? Thanks. Scot, this is John David. I'll take that. The numbers this quarter are pretty similar to the last quarter. So membership fees as well as advertising income contributed to a little more than half of our operating income improvement and a little shy of a third of the overall operating income for the business. Those are important growth drivers to our business, but they don't work without getting the basics right on core retail. So I think we're striking a nice balance for all of that. It is worth noting that this quarter, our business is 18% e-commerce. And reflecting back on Christina's question, that's a 300 basis points improvement from this point last year. So we continue to make progress in these digital channels, and clearly our customers are finding value in what they're finding at Walmart. Can I just add on that one, too? I think you look at our results. We've consistently grown profit faster than sales every quarter this year, and when you break it down, it's largely those ancillary businesses that are higher margin that are driving the result. I look at our advertising business, it was up 50%, and that is largely because of BBD, but the other markets' growth is also strong, and we'll see that kind of as you look at the half versus the quarter. When we look at the growth in those businesses, it's advertising revenue. It's membership. We're seeing membership grow across each of the individual markets with slightly different offerings, but all of them tailored to what are the needs of the local consumers. So that, with the addition of financial services, as well as really helping that whole model play out and the consistency of the execution across quarters, I think has been one of the things I'm most proud of. Maybe one more thing to add, whether it's the international business or here in the United States, when we look at the composition of growth in GMV for us, as an example, there's a healthy balance between increased traffic and improved conversion. So you've got more shoppers that are coming to Walmart or Walmart properties that are finding value in price and convenience. But we're also getting better at how we serve those customers. And I say that through conversion. We're getting better at converting someone who may just be eyeballs looking at our website to actually completing a checkout and putting something in their basket and having it delivered to their house. So we're pleased with our progress, but it also indicates we still have a long ways to go. We know that we can get better, and our team is very focused on that. Thank you. Our next question comes from the line of Peter Keith with Piper Sandler. Please proceed with your question. Hey, thank you. Good morning. So maybe as a follow-up to Scott's question, you did flag General Merchandise should continue to improve in the coming quarters. And I'm wondering if that continued improvement could have positive implications for some of these high-value revenue streams, such as marketplace, which accelerated nicely here, and supplier advertising and the like. Sure, Peter. Everything else being equal, you would expect that to have a positive benefit to the P&L as GM items tend to carry a higher gross margin than many of the grocery items. So we look forward to being able to benefit from that. But some of that is on us and continuing to grow our assortment through our marketplace, but some of it is a function of the economy overall. And so we'll watch that closely. Thank you. Our next question comes from the line of Peter Benedict with Baird. Please proceed with your question. Hi, good morning, everyone. Thanks for taking my question. Really, it's around competition. I'm curious your observations, what you're seeing in terms of the competitive response to the share gains that continue to accrue to the business. I'm thinking primarily in the U.S., but really any comments around that would be helpful. Thanks. Peter, this is Doug. I think the only thing that I would say is that the competitive set we focused on today is different, and it's changing over time, probably at a more rapid rate than it used to. Being in China and Mexico recently, we have some strong competitors there, and the ones we're focused on and learning from are different than the ones that we were focused on just a few years ago. Here in the U.S., we have fierce competition from all kinds of different directions. So our mindset is to be aware, to watch, to learn, and when we see the customer responding to something, to react if it makes sense for us to react and to change if we need to change. So we try to stay focused, straight ahead, eyes on customers, members, focused on our associates, have our competitors in our peripheral vision, but study them and learn and apply. I think you can see that in some of our results today. Thank you. Our next question comes from the line of Karen Short with Melius Research. Please proceed with your question. Hi, thanks for taking my question, and good to talk to you again. I kind of have two interrelated questions. So your OpEx at 21.2%, wondering what the potential is to get closer to 19% or get back to 19%. And obviously, that's in the context of e-com as it relates to losses. And then the second portion is just with all these alternative revenue streams that you have, at what point are you looking at a materiality conversation? Karen, clearly, those questions are for me. This is John David. I'll take them in reverse order. We report on a segment basis right now, and that satisfies the requirements that we have for segment reporting. So we'll continue to report out by international Sam's and U.S. If something changes in our business, we'll reevaluate that in the future. On OpEx, there are a couple of drivers, first of all, in the current quarter to the increase, and then I'll address your question related to where it could go. But in the current quarter, we saw a little bit more investment in marketing in the U.S. business, and that's helping to drive some of the performance in General Merchandise. So we're really pleased about that. The other is incentive pay for our frontline associates. We think it's important that our frontline associates are rewarded in the same way that shareholders are. And as we've outperformed this year, we've seen additional incentive pay for them, and that pressured SG&A in the third quarter. The other element gets to, I think, the essence of your question, which is the changing mix of our business. If you look at SG&A on a brick-and-mortar basis, it's less than what you have in digital channels. And so as we continue to grow digitally, as we continue to have more of our business that's coming through e-commerce, you're going to see some pressure on SG&A. That said, the team here is very focused on continuing to try to provide everyday low costs to enable us to have everyday low prices for our customers. And so we'd love to get back to the 20% range on SG&A. That requires work. But in any company, and especially one our size, there's always opportunities for efficiencies and the use of technology to better serve our customers and members. So we're working on that, but you have to keep in mind going forward that as we get more digital, you're going to see pressure on the SG&A line. Thank you. Our next question comes from the line of Seth Sigman with Barclays. Please proceed with your question. Great. Good morning, everyone. Obviously, the strength in the quarter was broad-based, but I wanted to focus on the acceleration in average ticket in the U.S. I think that was the strongest in over a year. I am curious if that was impacted by the hurricane or if there's some other type of inflection that you're starting to see in basket size, maybe an improvement in GM or attachments. Is that also maybe a benefit of attracting that higher-income consumer? Just any more context on that as we think about the run rate going forward. Thanks so much. Yeah, morning. This is John. I think everything you said, it does represent some of the improvements that we did see in the quarter. We did mention that there were some tailwinds from some one-time events that happened in the quarter. But the thing that I'm really proud of the team is we had the highest growth in units in food that we've seen in several years, which is great. Our General Merchandise business, as we mentioned, despite some deflation and the low single digits to mid-single digits range, we're positive comps of the units that grew that. It is all, I think, a reflection of starting with, are we selling the things that customers want to buy during the season they're in? Seasons are important. We ended October with a strong Halloween. So all those added up are important. The shift from, I'd say not necessarily from, but adding on digital business on top of our store business is helping us attract new customers and serve them well with the options that we have. The combination of both the product and the service offerings are working. The growth in deliveries under three hours is impressive. The team's doing a great job with that, and we need to continue that. We know customers are looking for both value, and they're looking to save time. Thank you. Our final question this morning comes from the line of Greg Melich with Evercore ISI. Please proceed with your question. Hi, thanks, guys. I wanted to follow up on the membership growth and what's driving that there and what sort of behavior you're seeing in terms of lift from people when they do sign up for Walmart+ in particular and what that flows through in terms of the importance of data and then using that in the new businesses? Hey, Greg, this is John. I'll start with Walmart+. Walmart+ is a really important part of the offer. As we've said this morning, we have a clear strategy. Our results reflect the financial framework that we have laid out. The growth in e-commerce is an indicator of where the customer is headed, and Walmart+ is a great way for customers to amortize the cost of delivery over time. And so when someone joins the program, we're focused right away on ensuring that we deliver their order on time when they ask for it, not ahead, not after, and that the order is full and it's complete with as few substitutions as possible. And when we do that well, that opens up the ability for the business to talk to them about other things that are going on in their life, whether it's changing the tires on their car or helping them with a birthday cake. There are just so many things we can do in core retail that makes life easier at a value for our customers. So this is an important part of the overall equation. We mentioned results up over double-digit in Walmart+ again, so good to see the momentum. And looking from here forward, in this quarter in particular, it's about executing really well. We need to be really clear on our offer. We need to pull the orders on time without substitutions, and we need to deliver to customers exactly what they're looking for. This is a time of year when families get together for meals and gifts, and it's really important that we're there for them and we enable them to have the best season they can have. I'll just add from an international perspective. I think when we think about membership, there's a bit of a spectrum. So if you think about in Chile, we actually have a loyalty program which allows us to have over 80% of our customers' data. And then if you look at it in Mexico, we've just launched Beneficios, which has allowed us to get 28 million members sign up, which allows us just to be a lot more personalized in the way that we show up for those members. Those are free loyalty membership programs right through to a paid membership where you're really bundling delivery capabilities. If you look at that, we're seeing growth across most of the major markets. But if I then just point to Sam's China, they've had membership income grow of over 30%. And I think that is a testament to the quality of their CVP and how attractive that is to our customers, not only the in-club offering, but also the ability to do convenience with over 80% of their deliveries being under an hour. So we think about membership as a way of driving loyalty to create the ability to personalize, to have a richer, stickier relationship with our members, and to bundle up the ability to do delivery, which is something our customers are telling us is really important. Yeah, I think in Sam's Club, we had a 15.1% growth in membership income, but none of this is a gift. It's all an achievement. It's just hard work. John talked about execution. We are executing on our member value proposition, which is value. It's assortment. It's great experiences, and it's building that trust with the members so that you build a lifelong relationship with them. We had some great results, as you've heard, in e-commerce and in club, which we're really proud of, and we've seen the outcome of that, so great inputs give you great outcomes, and we've seen digital penetration increase 400 basis points, Scan & Go up 250 basis points, and that's resulted in all-time high memberships increasing, plus penetrations up 300 basis points, and our renewal is up 230. So just really nailing those basics, listening to your members and giving them what they want gives you great outcomes. All right. I want to thank everybody for joining us today. We look forward to engaging with many of you in the coming weeks and months at investor conferences. I want to ask you to mark your calendars for our next investment community meeting, which is on April 8th and 9th, 2025. Doug? Really proud and grateful to the team and of the team. The folks that are in this room are leaders more broadly and our associates around the world. They're doing a nice job of delivering short-term results, managing today and building for tomorrow at the same time so that we can continue this momentum. I think we are being appropriately aggressive as it relates to our level of investments, whether that's related to price or associate investments or automation, for example. And I'm really encouraged, by the way, folks who are working together with our tech teams to build things in a way that's faster and more effective. We've got room to improve there. We probably always will. But when I look at what we're putting together, the combination of businesses, I think the outcome is one that can continue to grow the top line while growing the bottom line faster in a sustainable way, but while making the necessary investments as we work towards trying to serve people better. For decades, it's been my experience that our customers and members want four things from us. They want low prices. They want a really broad assortment of products and services. They want to have a great experience, and that includes convenience and saving them time. And they want to do business with somebody they trust. And in this business, you get what you earn. So we are working hard today to make sure that tomorrow we're continuing to have quarters like the one that we had this quarter. Thank you all. Thank you. This concludes today's conference call. You may disconnect your lines at this time. Thank you for your participation.