Comparing Commerce at Walmart, Amazon

Walmart ($WMT) made headlines this week with its latest quarterly report, which included news of strong earnings over the holiday season but spooked investors with warnings that growth in 2025 might be slower than first anticipated.  

One number that caught our eye was Walmart’s quarterly revenue, which clocked in at $173.4 billion. That’s impressive, but it’s also a shade lower than quarterly revenue at rival retail giant Amazon.com ($AMZN), which reported $187.8 billion for its most recent quarter. 

But wait! Is it really fair to compare Walmart and Amazon like that? After all, Amazon has a significant operating segment that has nothing to do with consumer commerce: Amazon Web Services, an IT hosting platform that Amazon sells as a service to other companies. Walmart doesn’t have a comparable line of business. 

So if we want to compare the brick-and-mortar world of Walmart against the e-commerce world of Amazon, how can we do that? 

Actually, in Calcbench it’s not that hard. Our databases track segment-level disclosures that companies make — and since Amazon reports AWS as its own operating segment, you can (a) identify AWS revenue and operating expenses; (b) subtract those numbers from Amazon’s total revenue and opex; and (c) arrive at a number that depicts Amazon’s e-commerce operations only, which you can then compare to Walmart.

For example, Figure 1, below, compares quarterly revenue between Walmart and Amazon’s global e-commerce revenue (basically, everything except the AWS segment) for the last three years. 

Now we can see that Amazon’s e-commerce performance is closing in on Walmart’s revenue numbers — but it hasn’t surpassed the Arkansas giant yet. 

Next question: what about operating income? After all, Walmart and Amazon might seem roughly equal in revenue dollars, but the two companies have radically different operations. 

Well, you can answer that question in Calcbench too. Amazon reports three operating segments: North America, International, and AWS. For each of those segments, the company also discloses revenue and operating income.

So by using our Export Data Tables feature and doing a bit of math, we were able to add up the revenue and operating income for Amazon’s e-commerce operations (that is, the North America and International segments), and then calculate operating margin for those e-commerce operations. 

Meanwhile, Walmart’s operating segments are all about retail operations anyway, so calculating its operating margins is a breeze: just track the company’s total revenue and total operating income.

That’s how we arrived at Figure 2, below.

Hmmm. That chart allows you to ask some really interesting questions. For example, why did Amazon run a negative operating margin in 2022? That was a year of inflation and massive hiring in the tech sector — so to what extent did those forces pressure operating expenses in the e-commerce division? How has Amazon returned to growing operating margins since then? 

Or consider Walmart, largest business on the planet: its operating margins have been positive (good), but they’ve also held remarkably steady over the last three years. That insight allows financial analysts to ponder more precise questions about how Walmart will navigate 2025 (where, remember, the company just posted lower earnings guidance) and fend off rivals such as Amazon — or all the other brick-and-mortar retailers out there, many of which haven’t even filed their latest quarterly reports yet. 

Our point here is simply that headline numbers in an earnings release or on the primary financial statements rarely tell the whole picture — but the data is there, tucked away in the footnotes. Yes, you need to pull that data out of the footnotes so that you can see what it tells you; but with the right technology platform, no, it’s not that hard to do.