OREANDA-NEWS. Walmart reports Q4 EPS of USD 1.67, full year EPS of USD 5.02; Walmart U.S. gains market share, adds USD 4.7 billion in comp sales for year; Company announces FY 14 dividend of USD 1.88, up 18% or USD 0.29 per share.
Wal-Mart Stores, Inc. (Walmart) reported fiscal year 2013 fourth quarter diluted earnings per share from continuing operations (EPS) of USD 1.67, a 10.6 percent increase compared to last year. Full year EPS were USD 5.02, also a 10.6 percent increase over last year. The company's quarter and full year performance benefited from a lower than expected effective tax rate. Last year's fourth quarter EPS were USD 1.51.
The company announced its annual fiscal year 2014 dividend of USD 1.88 per share, an 18 percent increase or USD 0.29 per share, over last year's dividend of USD 1.59 per share. [Note: Please see separate release on dividend dated Feb. 21, 2013.]
Walmart U.S. added more than USD 10 billion in net sales during fiscal year 2013, including approximately USD 4.7 billion in comp sales. For the fourth quarter, Walmart U.S. reported a 1.0 percent comp sales increase. Walmart U.S. gained market share1 in "food, consumables, health & wellness/OTC," as well as the entertainment categories and toys.
Walmart International grew net sales 7.4 percent to USD 135.2 billion for the year. On a constant currency basis2, net sales would have increased 7.8 percent to USD 135.7 billion.
Consolidated net sales reached USD 466.1 billion for the year, an increase of more than USD 22 billion, or growth of 5.0 percent.
All three operating segments and the total company leveraged operating expenses for the year.
Consolidated operating income was USD 27.8 billion for the full year, an increase of 4.7 percent over last year.
Walmart reported strong free cash flow2 of USD 12.7 billion for the 12 months ended Jan. 31, 2013, an 18.1 percent increase over last year.
Return on investment2 (ROI) for fiscal year ended Jan. 31, 2013 was 18.2 percent.
The company returned USD 13.0 billion to shareholders through dividends and share repurchases during fiscal year 2013.

1 Sources: The Nielsen Company, 13 weeks ended Jan. 26, 2013. The NPD Group, three-month period ending Dec. 31, 2012.

2 See additional information at the end of this release regarding non-GAAP financial measures.

Feb. 21, 2013-- Wal-Mart Stores, Inc. (NYSE: WMT) today reported financial results for the fourth quarter and full year ended Jan. 31, 2013.

Net sales for the fourth quarter of fiscal 2013 were USD 127.1 billion, an increase of 3.9 percent from USD 122.3 billion in last year's fourth quarter. On a constant currency basis1, net sales would have increased 3.7 percent to USD 126.8 billion. Membership and other income decreased 7.8 percent to USD 815 million, due to lower other income. Total revenue for the fourth quarter was USD 127.9 billion, a 3.9 percent increase over last year.

Income from continuing operations attributable to Walmart for the fourth quarter was USD 5.6 billion, up 7.9 percent. Diluted earnings per share from continuing operations attributable to Walmart (EPS) for the fourth quarter of fiscal 2013 were USD 1.67. The effective tax rate for the fourth quarter was 27.7 percent, which was lower than the company's expectations, and compares to 30.9 percent last year. The fourth quarter effective tax rate benefited from a number of discrete tax items, including positive impact from fiscal 2013 legislative changes, most notably the American Taxpayer Relief Act of 2012. In comparison, EPS for the fourth quarter of last year were USD 1.51. Fiscal 2013 results

Consolidated net sales for the full fiscal year were USD 466.1 billion, an increase of 5.0 percent over fiscal 2012. Net sales included approximately USD 4.0 billion from acquisitions and approximately USD 4.5 billion of negative impact from currency exchange rate fluctuations. Membership and other income was USD 3.0 billion, a decrease of 1.6 percent from the prior year. Total revenue was USD 469.2 billion, an increase of 5.0 percent or USD 22.2 billion.

Income from continuing operations attributable to Walmart was USD 17.0 billion, a 7.8 percent increase from USD 15.8 billion last year. For fiscal 2013, EPS were USD 5.02 versus last year's EPS of USD 4.54, an increase of 10.6 percent. The effective tax rate for the full year was 31.0 percent, compared to 32.6 percent for the prior year. This rate was below the company's annual guidance of 32.5 to 33.5 percent, primarily due to the fourth quarter discrete tax items noted above. Company well positioned for long term

"Walmart topped off a really good year with a solid fourth quarter, and I'm proud of what we accomplished as a team," said Mike Duke, Wal-Mart Stores, Inc. president and chief executive officer. "Every day, our associates around the world deliver on our mission to help customers save money so they can live better. Together, we added USD 22 billion in sales to top USD 466 billion. Walmart U.S. was a key driver of our five percent net sales increase.

"Our management team is focused on a few key areas critical to Walmart's long-term success," Duke added, as he outlined them.
Delivering a strong Walmart U.S. business
Improving returns for International
Driving greater efficiency through disciplined capital allocation
Meeting our five-year leverage goal
Investing in Global eCommerce, and
Continuing to strengthen our company's compliance organization

1 See additional information at the end of this release regarding non-GAAP financial measures.

"We have high expectations for fiscal 2014, and I'm optimistic as I look ahead," he said. "Walmart is operating in markets that offer continued opportunity for growth, both in our stores and online. With our core Walmart U.S. business operating so well, our investments in e-commerce and our international markets focused on growth and improving returns, we are truly the best positioned global retailer." Leverage

The company leveraged operating expenses for the full year, including the USD 157 million of professional fees and expenses related to the ongoing Foreign Corrupt Practices Act (FCPA) matter.

"Fiscal year 2013 was the first year of our five-year plan to reduce operating expenses as a percentage of sales by at least 100 basis points," said Charles Holley, executive vice president and chief financial officer. "We made progress toward our five-year goal, reducing expenses for the year by 14 basis points. Walmart U.S. led this effort. The entire company has rallied around this leverage challenge, and we expect we will continue to see progress towards this goal." Strong returns

During the fourth quarter, the company repurchased approximately 42.3 million shares for USD 2.9 billion, bringing the full year repurchases to 113.2 million shares for USD 7.6 billion. In addition, the company paid USD 1.3 billion and USD 5.4 billion in dividends for the quarter and year, respectively. For the year, Walmart returned USD 13.0 billion to shareholders through dividends and share repurchases.

Walmart ended the year with free cash flow1 of USD 12.7 billion, compared to USD 10.7 billion in the prior year. Excellent cash flows from operations and disciplined capital allocation helped deliver very strong free cash flow.

Return on investment1 (ROI) for the year ended Jan. 31, 2013 was 18.2 percent, compared to 18.6 percent for the prior year. The decline was primarily driven by acquisitions and currency exchange rate fluctuations. Guidance


"In fiscal 2013, we reported EPS of USD 1.09 for the first quarter. We expect first quarter fiscal 2014 EPS to range between USD 1.11 and USD 1.16," Holley said. "These estimates consider current economic factors that are affecting customers in many of our markets.

“We know there are challenges ahead, but we believe our strong financial position, along with our EDLC and EDLP operating model, will continue to produce strong sales and returns for our shareholders,” Holley said. “In fiscal 2013, we reported full year EPS of USD 5.02. For fiscal 2014, we expect EPS to range between USD 5.20 and USD 5.40, which includes increased fiscal 2014 costs of around USD 0.09 per share for our e-commerce operations. We are excited about the opportunities these investments will provide."

Fiscal 2014 EPS guidance assumes that currency rates remain at today's levels and takes into account the company's forecast for the annual effective tax rate to range between 32.0 and 33.0 percent. Additionally, the company's guidance considers the costs associated with the FCPA and compliance matters, which are estimated to be approximately USD 40 to USD 45 million for the first quarter of fiscal 2014.

1 See additional information at the end of this release regarding non-GAAP financial measures.
Walmart International's net sales included approximately USD 200 million related to an acquisition and a positive impact of approximately USD 147 million from currency exchange rates. On a constant currency basis,1 net sales would have been USD 37.6 billion, an increase of 6.0 percent over last year.
Net sales for Sam's Club, excluding fuel, were USD 13.0 billion, an increase of 3.2 percent from last year.
Consolidated net sales, on a constant currency basis,1 would have increased 3.7 percent to USD 126.8 billion.

The following explanations provide additional context to the table for the fiscal years ended Jan. 31.
Walmart International's net sales included approximately USD 4.0 billion related to acquisitions and a negative impact of approximately USD 4.5 billion from currency exchange rate fluctuations. On a constant currency basis,1 net sales would have been USD 135.7 billion, an increase of 7.8 percent over last year.
Net sales for Sam's Club, excluding fuel, were USD 49.8 billion, an increase of 4.6 percent from last year.
Consolidated net sales, on a constant currency basis,1 would have increased 5.1 percent to USD 466.7 billion.
Walmart U.S. grew operating income faster than sales for the quarter and full year.
Walmart International's operating income included a net positive impact of approximately USD 80 million related to an acquisition and currency exchange rate fluctuations in the fourth quarter. Full year operating income included a net negative impact of approximately USD 56 million related to acquisitions and currency exchange rate fluctuations.
On a constant currency basis,1 Walmart International's operating income would have increased 2.6 percent and 9.2 percent for the fourth quarter and full year, respectively.
Operating income for Sam's Club, excluding fuel, decreased 6.0 percent for the quarter, due primarily to a reduction in gross profit margin from price investment strategies. Full year operating income, excluding fuel, increased 5.9 percent, growing faster than sales.
Consolidated operating income, on a constant currency basis,1 would have increased 1.4 percent for the quarter and 4.9 percent for the year.

"The Walmart U.S. team continued to deliver results," said Bill Simon, Walmart U.S. president and chief executive officer. "For the quarter, operating income grew 170 basis points faster than sales, and for the year, we grew operating income faster than sales in every quarter."
During the 13-week period, the Walmart U.S. comp was driven by an increase in average ticket of 1.1 percent, and a traffic decline of 10 basis points. According to the Nielsen Company, we gained 40 basis points of market share1 in the measured category of "food, consumables and health & wellness/OTC" during the 13 weeks ended Jan. 26, 2013. And, according to The NPD Group for the three-month period ending Dec. 31, 2012, we also improved market share1 in toys and the Walmart entertainment categories.

"Despite comps at the low end of the guidance, our market share1 gains, as noted by Nielsen and NPD, along with our two-year positive comp trend indicates the underlying strength of Walmart's business," said Simon. "Comp sales grew by 1.0 percent for the quarter, lapping a solid 1.5 percent comp last year. This represented USD 743 million in comp growth for the quarter."

The Walmart U.S. 13-week comp for last year's first quarter 13-week period rose 2.6 percent.

"We are confident that our low prices will continue to resonate, as families adjust to a reduced paycheck and increased gas prices," Simon said. "We see the underlying health of the Walmart U.S. business is sound, and sales trends are similar to what we've demonstrated in the last few quarters. However, February sales started slower than planned, due in large part, to the delay in income tax refunds. We began seeing increased tax refund check activity late last week in our stores, resulting in a more normalized weekly sales pattern for this time of the year. Due to the slower sales rate in the first few weeks of this year's first quarter, we are forecasting comp sales for the 13-week period from Jan. 26 to Apr. 26, 2013 to be around flat. We continue to monitor economic conditions that can impact our sales, such as rising fuel prices, changes in inflation and the payroll tax increase."

The Sam's Club 13-week comp, excluding fuel, benefited from a 1.6 percent increase in traffic and a 0.7 percent increase in average ticket.

"Overall, we are proud of the accomplishments this year at Sam's Club, but also recognize the mounting economic concern from both small businesses and consumers," said Rosalind Brewer, Sam's Club president and chief executive officer. "The business member at Sam's Club is an integral part of our comp sales. Recent traffic patterns of our business members indicate that they are more deliberate in their spending due to macro-economic factors. Additionally, like Walmart U.S., our Advantage members are pressured by higher payroll income taxes, ongoing unemployment and higher gas prices. Our role at Sam's Club is to support our members by creating value for them through price investments."

Last year, Sam's Club comp, without fuel, for the first quarter comparable 13-week period rose 5.3 percent.

"Our primary growth for fiscal 2014 will come from comp sales," Brewer said. Similar to Walmart U.S., the first two weeks of our first quarter comp period were below plan, but have improved over the last week. "We expect comp club sales, without fuel, for the current 13-week period from Jan. 26, 2013 through Apr. 26, 2013, to range between flat and 2.0 percent."

Walmart U.S. and Sam's Club will report comparable sales for the 13-week period ending Apr. 26 on May 16 when the company reports first quarter results. For fiscal year 2014, Walmart will report comparable store sales on a 53-week basis, with 4-5-5 reporting for the fourth quarter. Walmart's comp reporting first week starts with Sat., Jan. 26, 2013.

1 Sources: The Nielsen Company, 13 weeks ended Jan. 26, 2013. The NPD Group, three-month period ending Dec. 31, 2012.