20.02.2015, 01:29
Walmart announces Q4 underlying EPS of $1.61 and additional strategic investments in people & e-commerce; Walmart U.S. comp sales increased 1.5 percent
OREANDA-NEWS. February 20, 2015.
Fourth quarter highlights
BENTONVILLE, Ark. --(BUSINESS WIRE)--Feb. 19, 2015--
Wal-Mart Stores, Inc. (NYSE: WMT) today reported financial results for
the fourth quarter and fiscal year ended Jan. 31, 2015. The company also
announced a significant investment in its people and e-commerce
businesses for the new fiscal year, along with its annual shareholder
dividend.
Consolidated net sales for the fourth quarter were \\$130.7 billion , an
increase of 1.4 percent over last year. This quarter included the
negative impact of approximately \\$2.6 billion from currency exchange
rate fluctuations. On a constant currency basis,1 net
sales increased 3.5 percent to \\$133.2 billion . Membership and other
income decreased 0.5 percent. Total revenue was \\$131.6 billion , an
increase of approximately \\$1.9 billion , or 1.4 percent.
Consolidated net income attributable to Walmart was\\$5.0 billion , a 12.1
percent increase. Diluted earnings per share from continuing operations
attributable to Walmart were \\$1.53 , compared to last year's \\$1.34 .
Underlying1 diluted earnings per share from continuing
operations attributable to Walmart were \\$1.61 , compared to \\$1.60 last
year.
Consolidated net sales for the year were \\$482.2 billion , an increase of
1.9 percent over fiscal year 2014. Net sales included approximately \\$5.3
billion of negative impact from currency exchange rate fluctuations.
Membership and other income increased 6.3 percent. Total revenue was
\\$485.7 billion , an increase of approximately \\$9.4 billion , or 2.0
percent. Constant currency revenue was almost \\$491 billion .
Consolidated net income attributable to Walmart was\\$16.4 billion , up
2.1 percent. Diluted earnings per share from continuing operations
attributable to Walmart were \\$4.99 , or 2.9 percent above last year's
\\$4.85 . Underlying1 diluted earnings per share from
continuing operations attributable to Walmart were \\$5.07 , compared to
\\$5.11 last year.
The EPS impact of certain discrete items on the company's reported fourth quarter and fiscal year results from continuing operations was\\$0.08 per share. The discrete items, both of which were previously
disclosed, and the respective EPS impact was as follows:
Last year, the total EPS impact of discrete items on the company's
reported fourth quarter and full year results from continuing operations
was \\$0.26 per share. [Note: Details provided in press release
issued Feb. 20, 2014 .]
"We had a good fourth quarter to close out our fiscal year, with
underlying EPS of \\$1.61 . Walmart U.S. delivered better than expected
comp sales. Sam's Club had its best performance of the year, and Walmart
International had solid sales and profitability," said
The company provided guidance for EPS and updated its estimate for
fiscal year 2016 sales growth.
"Given the investments we're making in our worldwide e-commerce initiatives and in our associates through higher wages and training, we expect operating income to be pressured in fiscal 2016," said
The company paid \\$6.2 billion in dividends and repurchased approximately
13.4 million shares for \\$1.0 billion during the year. In total, the
company returned \\$7.2 billion to shareholders through dividends and
share repurchases.
Return on investment1 (ROI) for the trailing 12-months ended Jan. 31, 2015 was 16.9 percent, which was relatively flat compared to ROI for the fiscal year endedJan. 31, 2014 . The slight change in ROI
was primarily due to continued investments in store growth and
e-commerce initiatives, offset by currency exchange rate fluctuations.
Free cash flow1 was\\$16.4 billion for the 12-months
ended Jan. 31, 2015, compared to \\$10.1 billion in the prior year. The
increase in free cash flow was primarily due to the timing of payments
for accounts payable and accrued liabilities, as well as the timing of
income tax payments, combined with lower capital expenditures.
1 See additional information at the end of this release regarding non-GAAP financial measures.
The company reported U.S. comparable store sales based on its 13-week
and 52-week retail calendar for the period ended Jan. 30, 2015 and its
14-week and 53-week retail calendar for the period ended Jan. 31, 2014
as follows:
*The retail sales calendar for the year ended January 31, 2014 included
53 weeks. As such, fiscal year 2014 comparable store sales presented
above are for the 14 weeks and 53 weeks ended January 31, 2014 .
During the 13-week period, Walmart U.S. comp traffic rose 1.4 percent, while average ticket increased 0.1 percent.
Excluding fuel,1 for the 13-week period,Sam's Club
comp traffic was up 1.5 percent, and average ticket increased 0.5
percent.
The company's e-commerce sales impact includes those sales initiated through the company's websites and fulfilled through the company's dedicated e-commerce distribution facilities, as well as an estimate for sales initiated online, but fulfilled through the company's stores and clubs. For the 13-week period, e-commerce sales positively impacted comp sales in Walmart U.S. by approximately 30 basis points, and positively impactedSam's Club comp sales by approximately 40 basis points.
"Our fourth quarter was the first positive traffic comp we've had since the third quarter of fiscal year 2013," said
Net sales, including fuel, were as follows:
The following explanations provide additional context to the above table
for the fiscal year.
Segment operating income was as follows:
1 See additional information at the end of this
release regarding non-GAAP financial measures.
For the year, Walmart U.S. operating income was impacted primarily by increased health-care costs from higher enrollment rates and medical cost inflation.
Last year's operating income forWalmart International was impacted by a
number of discrete charges. The result is that year-over-year
comparisons show improvement. Excluding these items from last year,
Walmart International grew operating income on a reported and on a
constant currency basis.
For the 13-week period ending May 1, 2015 , Walmart U.S. expects comp
store sales to increase between 1 and 2 percent. Last year, Walmart's
comp sales were relatively flat for the 13-week period ended May 2, 2014 .
Sam's Club expects comp sales, excluding fuel,1 for
the 13-week period ending May 1, 2015 to rise between 1 and 2 percent.
Last year, comp sales, excluding fuel,1 decreased 0.5
percent for the 13-week period ended May 2, 2014 .
Walmart U.S. and Sam's Club will report comparable sales for the 13-week
period ending May 1, 2015 on May 19 , when the company reports first
quarter results.
Wal-Mart Stores, Inc. (NYSE: WMT) helps people around the world save
money and live better -- anytime and anywhere -- in retail stores,
online, and through their mobile devices. Each week, more than 250
million customers and members visit our 11,453 stores under 71 banners
in 27 countries and e-commerce websites in 11 countries. With fiscal
year 2015 revenue of \\$485.7 billion , Walmart employs approximately 2.2
million associates worldwide. Walmart continues to be a leader in
sustainability, corporate philanthropy and employment opportunity.
Additional information about Walmart can be found by visiting http://corporate.walmart.com
on Facebook at http://facebook.com/walmart
and on Twitter at http://twitter.com/walmart.
After this earnings release has been furnished to the Securities and
Exchange Commission (SEC ), a pre- recorded call offering additional
comments on the quarter and the full year will be available to all
investors. Information included in this release, including
reconciliations, and the pre-recorded phone call and related information
can be accessed via webcast by visiting the investor information area on
the company's website at www.stock.walmart.com.
Callers within the U.S. and Canada may dial 877-523-5612 and enter pass
code 9256278. All other callers can access the call by dialing
201-689-8483 and entering pass code 9256278.
More information on Walmart's associate pay structure and training
announcement for its U.S. associates, including a blog and video from
Walmart CEO
This release contains statements as to Walmart management's guidance
regarding: (1) Walmart's diluted earnings per share from continuing
operations attributable to Walmart for the fiscal year ending Jan. 31,
2016 and the three months ending Apr. 30, 2015 ; (2) the range of the per
share amount of investment Walmart will make in its additional strategic
wage structure and training investments for U.S. associates in the first
quarter of, and for all of, the fiscal year ending Jan. 31, 2016 and the
aggregate amount of that investment in the fiscal year ending Jan. 31,
2016 ; (3) the range of the per share amount of the incremental
investment Walmart will make in e-commerce in the fiscal year ending
Jan. 31, 2016 ; (4) the range of the total of the investment per share to
be made in Walmart's additional strategic wage structure and training
investments for U.S. associates in the fiscal year ending Jan. 31, 2016
and the incremental investment Walmart will make in e-commerce in the
fiscal year ending Jan. 31, 2016 ; (5) the comparable store sales of the
Walmart U.S. segment and the comparable club sales, excluding fuel, of
the Sam's Club segment for the 13-week period ending May 1, 2015 ; (6)
the growth in consolidated net sales and the possible negative impact of
currency exchange rates on consolidated net sales for the fiscal year
ending Jan. 31, 2016 ; (7) the expected global growth in e-commerce sales
in the fiscal year ending Jan. 31, 2016 ; and (8) the range of aggregate
capital expenditures and the range of growth in square footage for the
fiscal year ended Jan. 31, 2015 , as well as management's expectations
that Walmart's operating income will be pressured in the fiscal year
ending Jan. 31, 2016 and that Walmart will continue to integrate
Walmart's physical locations with its e-commerce and mobile commerce
business (and assumptions underlying certain of such guidance and
expectations), that Walmart believes are "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of
1995, as amended.
These statements are intended to enjoy the protection of the safe harbor for forward-looking statements provided by that act and can be identified by the use of the word or phrase "expect," "expects," "forecasting," "growth target," "guidance," "will invest," "will continue," "will range" or "would cause" in or relating to such statements. Walmart's actual results may differ materially from the guidance provided and the expected results discussed in such forward-looking statements as a result of changes in facts, assumptions not being realized or other risks, uncertainties and factors, including:
SEC and certain of its
other filings with the SEC . You should read this release in conjunction
with that annual report on Form 10-K and Walmart’s quarterly reports on
Form 10-Q and current reports on Form 8-K filed with the SEC through
this release's date. Walmart urges you to consider all of these risks,
uncertainties and other factors carefully in evaluating the
forward-looking statements in this release. Walmart cannot assure you
that the results reflected or implied by any forward-looking statement
will be realized or, even if substantially realized, that those results
will have the forecast or expected consequences and effects for or on
Walmart’s operations or financial performance. The forward-looking
statements contained in this release are as of the date of this release.
Walmart undertakes no obligation to update these forward-looking
statements to reflect subsequent events or circumstances.
Wal-Mart Stores, Inc.
Reconciliations of and Other Information Regarding Non-GAAP Financial Measures
(Unaudited)
(In millions, except per share data)
The following information provides reconciliations of certain non-GAAP financial measures presented in the press release to which this reconciliation is attached to the most directly comparable financial measures calculated and presented in accordance with generally accepted accounting principles (GAAP). The company has provided the non-GAAP financial information presented in the press release, which is not calculated or presented in accordance with GAAP, as information supplemental and in addition to the financial measures presented in the press release that are calculated and presented in accordance with GAAP. Such non-GAAP financial measures should not be considered superior to, as a substitute for or alternative to, and should be considered in conjunction with the GAAP financial measures presented in the press release. The non-GAAP financial measures in the press release may differ from similar measures used by other companies.
Calculation of Return on Investment and Return on Assets
Management believes return on investment (ROI) is a meaningful metric to share with investors because it helps investors assess how effectively Walmart is deploying its assets. Trends in ROI can fluctuate over time as management balances long-term potential strategic initiatives with possible short-term impacts.
ROI was 16.9 percent for the fiscal year ended Jan. 31, 2015, which was relatively flat compared to ROI for the fiscal year endedJan. 31, 2014 .
The slight change in ROI was primarily due to continued investments in
store growth and e-commerce initiatives, offset by currency exchange
rate fluctuations.
We define ROI as adjusted operating income (operating income plus interest income, depreciation and amortization, and rent expense) for the trailing 12 months divided by average invested capital during that period. We consider average invested capital to be the average of our beginning and ending total assets, plus average accumulated depreciation and average amortization, less average accounts payable and average accrued liabilities for that period, plus a rent factor equal to the rent for the fiscal year or trailing 12 months multiplied by a factor of 8. When we have discontinued operations, we exclude the impact of the discontinued operations.
Our calculation of ROI is considered a non-GAAP financial measure because we calculate ROI using financial measures that exclude and include amounts that are included and excluded in the most directly comparable GAAP financial measure. For example, we exclude the impact of depreciation and amortization from our reported operating income in calculating the numerator of our calculation of ROI. In addition, we include a factor of 8 for rent expense that estimates the hypothetical capitalization of our operating leases. We consider return on assets (ROA) to be the financial measure computed in accordance with generally accepted accounting principles (GAAP) that is the most directly comparable financial measure to our calculation of ROI. ROI differs from ROA (which is consolidated income from continuing operations for the period divided by average total assets of continuing operations for the period) because ROI: adjusts operating income to exclude certain expense items and adds interest income; adjusts total assets of continuing operations for the impact of accumulated depreciation and amortization, accounts payable and accrued liabilities; and incorporates a factor of rent to arrive at total invested capital.
Although ROI is a standard financial metric, 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. We urge you to understand the methods used by other companies to calculate their ROI before comparing our ROI to that of such other companies.
The calculation of ROI, along with a reconciliation to the calculation of ROA, the most comparable GAAP financial measure, is as follows:
Free Cash Flow
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. Free cash flow was\\$16.4 billion and \\$10.1 billion for the fiscal years
ended Jan. 31, 2015 and 2014, respectively. The increase in free cash
flow was primarily due to the timing of payments for accounts payable
and accrued liabilities, as well as the timing of income tax payments,
combined with lower capital expenditures.
Free cash flow is considered a non-GAAP financial measure. Management believes, however, that free cash flow, which measures our ability to generate additional cash from our business operations, is an important financial measure for use in evaluating the company's financial performance. Free cash flow should be considered in addition to, rather than as a substitute for, consolidated income from continuing operations as a measure of our performance and net cash provided by operating activities as a measure of our liquidity.
Additionally, 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.
Although other companies report their free cash flow, numerous methods may exist for calculating a company's free cash flow. As a result, the method used by Walmart's management to calculate our free cash flow may differ from the methods used by other companies to calculate their free cash flow. We urge you to understand the methods used by other companies to calculate their free cash flow before comparing our free cash flow to that of such other companies.
The following table sets forth a reconciliation of free cash flow, a non-GAAP financial measure, to net cash provided by operating activities, which we believe to be the GAAP financial measure most directly comparable to free cash flow, as well as information regarding net cash used in investing activities and net cash used in financing activities.
1 "Net cash used in investing activities" includes
payments for property and equipment, which is also included in our
computation of free cash flow.
Constant Currency
In discussing our operating results, the term currency exchange rates refers to the currency exchange rates we use to convert the operating results for all countries where the functional currency is not the U.S. dollar. 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. Throughout our discussion, we refer to the results of this calculation as the impact of currency exchange rate fluctuations. When we refer to constant currency operating results, this means operating results without the impact of the currency exchange rate fluctuations and without the impact of acquisitions, if any, until the acquisitions are included in both comparable periods. The disclosure of constant currency amounts or results permits investors to understand better Walmart's underlying performance without the effects of currency exchange rate fluctuations or acquisitions.
The table below reflects the calculation of constant currency for total revenues, net sales and operating income for the three months and fiscal year endedJan. 31, 2015 .
Underlying EPS
The underlying diluted earnings per share from continuing operations attributable to Walmart (Underlying EPS) for each of the three-month periods and fiscal years endedJan. 31, 2015 and 2014 is considered a
non-GAAP financial measure under the SEC's rules because the Underlying
EPS for each such period includes certain amounts not included in the
diluted earnings per share from continuing operations attributable to
Walmart calculated in accordance with GAAP (EPS) for each of the
three-month periods and fiscal years ended Jan. 31, 2015 and 2014.
Management believes that the Underlying EPS for each of the three-month
periods and fiscal years ended Jan. 31, 2015 and 2014 is a meaningful
metric to share with investors because that metric, which adjusts EPS
for such period for certain items recorded in such period, is the metric
that best allows comparison of the performance for the comparable
period. In addition, the metric affords investors a view of what
management considers Walmart's core earnings performance for each of the
three-month periods and fiscal years ended Jan. 31, 2015 and 2014 and
also affords investors the ability to make a more informed assessment of
such core earnings performance for the comparable period.
We have calculated the Underlying EPS for the three months and the fiscal year endedJan. 31, 2015 by adjusting the EPS for each period for
the amount of the dilutive impact of: (1) the effect of the wage and
hour litigation matter (Wage and Hour Litigation Matter) and (2) the
closure of approximately 30 underperforming stores in Japan (Japan Store
Closures).
Underlying EPS for each of the three months and the fiscal year endedJan. 31, 2015 is a non-GAAP financial measure. The most directly
comparable financial measure calculated in accordance with GAAP is EPS
for the three months and the fiscal year ended Jan. 31, 2015 ,
respectively.
As previously disclosed in our fiscal year ended Jan. 31, 2014 press
release, we have calculated the Underlying EPS for the three months and
the fiscal year ended Jan. 31, 2014 by adjusting the EPS for each period
for the amount of the dilutive impact of: (1) Brazil non-income tax
contingencies (Brazil Taxes); (2) Brazil employment claim contingencies
(Brazil Employment Matters); (3) the closure of 54 underperforming
Brazil and China stores (Store Closures); (4) China store lease expense
charges (Lease Matters); (5) the India transaction (India Transaction);
and (6) Sam's Club U.S. staff restructuring and club closure (Sam's
Restructuring).
Underlying EPS for the three months and the fiscal year endedJan. 31,
2014 is a non-GAAP financial measure. The most directly comparable
financial measure calculated in accordance with GAAP is EPS for the
three months and the fiscal year ended Jan. 31, 2014 .
Comparable Sales Measures and Sam's Club Measures
The following financial measures presented in the press release to which this reconciliation is attached are non-GAAP financial measures as defined by theSEC's rules:
Sam's Club comparable club sales for the historical
periods for which the corresponding Sam's Club Comparable Sales Measures
are presented calculated by including fuel sales are the financial
measures computed in accordance with GAAP most directly comparable to
the respective Sam’s Club Comparable Sales Measures. We believe Sam's
Club's projected comparable club sales for the 13-week period ending May
1, 2015 calculated by including fuel sales is the financial measure
computed in accordance with GAAP most directly comparable to the
projected comparable club sales of Sam's Club for the 13-week period
ending May 1, 2015 calculated by excluding fuel sales. We believe the
reported Sam's Club's net sales, percentage increase in net sales,
segment operating income and percentage increase in segment operating
income for the periods for which the corresponding Sam's Club Measures
are presented are the most directly comparable financial measures
computed in accordance with GAAP to the respective Sam’s Club Measures.
We believe that the presentation of the Sam's Club Comparable Sales Measures and the Sam's Club Measures provides useful information to investors regarding the company's financial condition and results of operations because that information permits investors to understand the effect of the fuel sales ofSam's Club , which are affected by the
volatility of fuel prices, on Sam's Club's comparable club sales and on
Sam's Club's net sales and operating income for the periods presented.
Fourth quarter highlights
-
Underlying1
EPS:
Wal-Mart Stores, Inc. (Walmart) reported fourth quarter fiscal year 2015 underlying1 diluted earnings per share from continuing operations (EPS) of\\$1.61 , compared to last year's underlying1 EPS of\\$1.60 . -
Reported EPS: Reported
EPS was
\\$1.53 , which includes a negative impact of\\$0.08 per share from certain discrete items. The company incurred a charge of\\$0.05 for a wage and hour litigation matter, and a charge of\\$0.03 for Walmart Japan store closures, both previously disclosed. Last year's EPS was\\$1.34 , which includes a negative impact from discrete items totaling\\$0.26 . -
Comps: Walmart
U.S. comp sales increased 1.5 percent for the 13-week period ended
Jan. 30, 2015 . Comp sales for the Neighborhood Market format increased approximately 7.7 percent.Sam's Club comp sales, without fuel,1 increased 2.0 percent for the same 13-week period. -
Revenue: Consolidated
revenue reached
\\$131.6 billion , an increase of\\$1.9 billion , or 1.4 percent. Currency exchange rate fluctuations negatively impacted revenue by approximately\\$2.6 billion .
-
EPS: Walmart's underlying1
EPS was
\\$5.07 , and reported EPS was\\$4.99 , which includes the negative impact of\\$0.08 from the discrete items noted above. -
Revenue: Consolidated
revenue reached
\\$485.7 billion , an increase of\\$9.4 billion , or 2.0 percent. Currency exchange rate fluctuations negatively impacted revenue by approximately\\$5.3 billion . Constant currency revenue was almost\\$491 billion . E-commerce sales globally rose approximately 22 percent for the year, to\\$12.2 billion . - New store growth: The company added nearly 33 million square feet of retail space in fiscal 2015, with 511 net new units globally.
-
Shareholder returns: The
company returned
\\$7.2 billion to shareholders through dividends and share repurchases. [Note: Please see separateFeb. 19, 2015 news release on FY 16 dividend.] -
Guidance: The company
issued full fiscal 2016 EPS guidance range of
\\$4.70 to \\$5.05 , and a first quarter forecast of\\$0.95 to \\$1.10 . This guidance reflects additional strategic wage and training investments for U.S. associates that were announced today, as well as incremental investments for Global eCommerce initiatives, totaling between\\$0.26 and \\$0.29 per share.
| Fourth quarter |
Consolidated net income attributable to Walmart was
| Fiscal year 2015 |
Consolidated net income attributable to Walmart was
The EPS impact of certain discrete items on the company's reported fourth quarter and fiscal year results from continuing operations was
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Wage and hour litigation matter |
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\\$0.05 |
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Closure of approximately 30 underperforming stores in Japan |
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\\$0.03 |
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| Investing for FY 2016 |
Doug McMillon,
1 See additional information at the end of this
release regarding non-GAAP financial measures.
According to McMillon, the leadership teams are very focused on
improving customer experiences through various investments and program
initiatives, and for several months, developed and tested new ideas to
reward associates for serving customers.
"We have work to do to grow the business. We know what customers want
from a shopping experience, and we're investing strategically to exceed
their expectations and better position Walmart for the future," said
McMillon. "Our first priority is to run great stores and clubs. We will
continue to integrate our physical locations with a great e-commerce and
mobile commerce business. We're strengthening investments in our people
to engage and inspire them to deliver superior customer experiences. We
will earn the trust of all Walmart stakeholders by operating great
retail businesses, ensuring world-class compliance, and doing good in
the world through social and environmental programs in our communities."
McMillon announced a bold new initiative on pay and training for U.S.
associates. Approximately 500,000 full-time and part-time associates at
Walmart U.S. stores and
"Today, we announced comprehensive changes to our hiring, training,
compensation and scheduling programs, as well as to our store management
structure. These changes will give our U.S. associates the opportunity
to earn higher pay and advance in their careers. We're pursuing a
comprehensive approach that is sustainable over the long term,"
explained McMillon. "By realigning our store operational structure,
associates can enjoy a closer relationship with their supervisors. In
addition, associates will have more control over their schedules. The
investment in these initiatives is more than
Walmart associates already have the opportunity for competitive
health-care and 401(k) benefits, sick leave, and access to bonus
incentive opportunities, discounts and educational programs. These
benefits and programs will continue to be available to current and
future associates.
"
Sam Walton knew that an inspired, dedicated team of associates was the
way to exceed our customers' expectations," said McMillon. "He often
said 'Our people make the difference.' I feel a big responsibility to
carry on what that phrase represents: the care and commitment that Sam
had for Walmart associates."
As part of today's announcement, Walmart and the
"Beyond this commitment, Walmart is also piloting a new, comprehensive
on-boarding and training program to create clear career pathways for
associates, so they can earn more and seek promotions," McMillon
explained. "We're encouraging our associates to continue their education
by providing no-cost access for them to complete their high school
diploma or GED, as well as free and low-cost college credit to reduce
the time and cost of earning a college degree. The skills and training
that an associate receives through this program will be transferable
outside of Walmart."
"Walmart has represented a ladder of opportunity since Sam started the
business, and we want to make sure that's the case going forward
everywhere we operate, including here in
| Guidance |
"Given the investments we're making in our worldwide e-commerce initiatives and in our associates through higher wages and training, we expect operating income to be pressured in fiscal 2016," said
Charles
Holley,
"Along with these significant investments, we expect ongoing headwinds
from currency exchange rates during the year. We also consider economic
conditions in our various markets and our estimated tax rate in
establishing our guidance ranges for the year," added Holley. "After
evaluating these factors, we are forecasting earnings per share for the
full year of fiscal 2016 to range between
This guidance compares to
"Given the potential impact of currency headwinds, we expect that our
fiscal year 2016 sales growth will be between 1 and 2 percent, versus
the 2 to 4 percent we provided at our October investor conference," said
Holley. "Our capital expenditure guidance of
| Returns |
Return on investment1 (ROI) for the trailing 12-months ended Jan. 31, 2015 was 16.9 percent, which was relatively flat compared to ROI for the fiscal year ended
Free cash flow1 was
1 See additional information at the end of this release regarding non-GAAP financial measures.
| U.S. comparable store sales results |
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Without Fuel |
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With Fuel |
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Fuel Impact | ||||||||||||
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13 Weeks Ended* |
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13 Weeks Ended* |
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13 Weeks Ended* | ||||||||||||
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1/30/2015 | 1/31/2014 |
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1/30/2015 | 1/31/2014 |
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1/30/2015 | 1/31/2014 | |||||||||
| Walmart U.S. |
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1.5 | % | -0.4 | % |
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1.5 | % | -0.4 | % |
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0.0 | % | 0.0 | % | |||
| Sam's Club |
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2.0 | % | -0.1 | % |
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-0.4 | % | -0.1 | % |
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-2.4 | % | 0.0 | % | |||
| Total U.S. |
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1.6 | % | -0.4 | % |
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1.2 | % | -0.4 | % |
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-0.4 | % | 0.0 | % | |||
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Without Fuel |
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With Fuel |
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Fuel Impact | ||||||
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52 Weeks Ended* |
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52 Weeks Ended* |
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52 Weeks Ended* | ||||||
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1/30/2015 | 1/31/2014 |
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1/30/2015 | 1/31/2014 |
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1/30/2015 | 1/31/2014 | |||
| Walmart U.S. |
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0.5% | -0.6% |
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0.5% | -0.6% |
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0.0% | 0.0% | |||
| Sam's Club |
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0.5% | 0.7% |
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-0.1% | 0.4% |
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-0.6% | -0.3% | |||
| Total U.S. |
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0.5% | -0.4% |
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0.4% | -0.4% |
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-0.1% | 0.0% | |||
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During the 13-week period, Walmart U.S. comp traffic rose 1.4 percent, while average ticket increased 0.1 percent.
Excluding fuel,1 for the 13-week period,
The company's e-commerce sales impact includes those sales initiated through the company's websites and fulfilled through the company's dedicated e-commerce distribution facilities, as well as an estimate for sales initiated online, but fulfilled through the company's stores and clubs. For the 13-week period, e-commerce sales positively impacted comp sales in Walmart U.S. by approximately 30 basis points, and positively impacted
"Our fourth quarter was the first positive traffic comp we've had since the third quarter of fiscal year 2013," said
Greg Foran, Walmart U.S.
president and CEO. "Walmart U.S. had increased traffic during the
six-week holiday season, with strong sales in seasonal, toys, home and
apparel. We completed almost 1 billion total transactions during the
holiday season, including our largest online day ever on Cyber Monday.
We are also pleased to deliver positive comp sales for the full year."
Foran also noted the strong comp sales of Neighborhood Market stores.
"Neighborhood Markets delivered approximately a 7.7 percent comp during
the quarter," he said. "We opened 233 Neighborhood Markets during the
year, and customers like their easy and convenient access to fresh
foods, pharmacy and services."
"Throughout the year, we've seen meaningful acceleration culminating in
comp sales, without fuel, of 2.0 percent for the 13-week period," said
Rosalind Brewer,
1 See additional information at the end of this
release regarding non-GAAP financial measures.
| Net sales results |
|
|
Three Months Ended | Fiscal Years Ended | ||||||||||||||||||||||||||
|
|
|
|
January 31, |
|
|
|
January 31, | |||||||||||||||||||||
| (dollars in billions) |
|
|
2015 | 2014 | Percent Change |
|
|
|
2015 | 2014 | Percent Change | |||||||||||||||||
| Walmart U.S. |
|
|
\\$ | 79.571 |
|
|
\\$ | 76.433 |
|
4.1 | % |
|
|
|
\\$ | 288.049 |
|
|
\\$ | 279.406 |
|
|
3.1 | % | ||||
| Walmart International |
|
|
36.205 |
|
|
|
37.674 |
|
|
-3.9 | % |
|
|
|
136.160 |
|
|
|
136.513 |
|
|
|
-0.3 | % | ||||
| Sam's Club |
|
|
14.874 |
|
|
14.679 |
|
1.3 | % |
|
|
|
58.020 |
|
|
57.157 |
|
|
1.5 | % | ||||||||
| Consolidated |
|
|
\\$ | 130.650 |
|
|
\\$ | 128.786 |
|
1.4 | % |
|
|
|
\\$ | 482.229 |
|
|
\\$ | 473.076 |
|
|
1.9 | % | ||||
-
On a constant currency basis,1
Walmart International's net sales for the year were\\$141.4 billion , an increase of 3.6 percent over last year. Currency exchange rate fluctuations negatively impacted net sales by\\$5.3 billion . -
Sam's Club net sales, excluding fuel,1 were\\$51.6 billion , an increase of 2.1 percent over last year. -
On a constant currency basis,1 consolidated net
sales increased 3.0 percent to
\\$487.5 billion .
David Cheesewright,
E-commerce sales globally rose approximately 22 percent for the year,
outpacing the market.
"Our investments started to enhance our customer experience during the
fourth quarter across digital and physical, and we saw good sales in
markets around the world. We made great progress on our priorities,
including our global technology platform, next generation fulfillment
network and the integration of digital and physical," said
Neil Ashe,
Global eCommerce president and CEO. "We have significant opportunities
to grow, as our core capabilities continue rolling out to customers
around the world, and we further expand mobile offerings and our
fulfillment centers. Fiscal year 2016 will continue to be a building
year, and we expect sales to grow globally in the mid 20s."
| Segment operating income |
|
|
Three Months Ended | Fiscal Years Ended | ||||||||||||||||||||||||||
|
|
|
|
|
January 31, |
|
|
|
January 31, | ||||||||||||||||||||
| (dollars in billions) |
|
|
|
2015 | 2014 | Percent Change |
|
|
|
2015 | 2014 | Percent Change | ||||||||||||||||
| Walmart U.S. |
|
|
|
\\$ | 6.177 |
|
|
\\$ | 6.216 | -0.6 | % |
|
|
|
\\$ | 21.336 |
|
|
\\$ | 21.787 |
|
|
-2.1 | % | ||||
| Walmart International |
|
|
|
2.050 |
|
|
|
1.232 |
|
66.4 | % |
|
|
|
6.171 |
|
|
|
5.153 |
|
|
|
19.8 | % | ||||
| Sam's Club |
|
|
|
0.510 |
|
|
0.395 | 29.1 | % |
|
|
|
1.976 |
|
|
1.843 |
|
|
7.2 | % | ||||||||
| Sam's Club (excluding fuel) |
|
|
|
0.456 |
|
|
0.382 | 19.4 | % |
|
|
|
1.854 |
|
|
1.817 |
|
|
2.0 | % | ||||||||
For the year, Walmart U.S. operating income was impacted primarily by increased health-care costs from higher enrollment rates and medical cost inflation.
Last year's operating income for
| U.S. comparable store sales review and guidance |
| Notes |
| Note to media |
Doug McMillon, letter to associates and infographics, is
available at blog.walmart.com. High resolution photos of stores and
customers, along with an infographic of financial highlights, are
available for download at stock.walmart.com.
1 See additional information at the end of this
release regarding non-GAAP financial measures.
| Forward Looking Statements |
These statements are intended to enjoy the protection of the safe harbor for forward-looking statements provided by that act and can be identified by the use of the word or phrase "expect," "expects," "forecasting," "growth target," "guidance," "will invest," "will continue," "will range" or "would cause" in or relating to such statements. Walmart's actual results may differ materially from the guidance provided and the expected results discussed in such forward-looking statements as a result of changes in facts, assumptions not being realized or other risks, uncertainties and factors, including:
- economic, geo-political, capital markets and business conditions, trends and events around the world and in the markets in which Walmart operates, including unemployment and underemployment levels;
- competitive initiatives of other retailers and other competitive pressures;
- inflation or deflation, generally and in particular product categories;
- consumer confidence, disposable income, credit availability, spending levels, shopping patterns, debt levels and demand for certain merchandise;
- customer traffic and average ticket in Walmart's stores and clubs and on its e-commerce websites;
- the mix of merchandise Walmart sells;
- availability of attractive opportunities for investment in e-commerce acquisitions and initiatives;
- consumer acceptance of Walmart's stores and clubs, e-commerce websites, mobile apps, initiatives, programs and merchandise offerings;
- disruption of and changes in seasonal buying patterns in Walmart's markets;
- changes in the level of public assistance payments;
- effects of weather conditions and events, catastrophes, natural disasters, public health emergencies, civil disturbances, and terrorist attacks;
- commodity prices and the cost of goods Walmart sells;
- transportation, energy and utility costs;
- selling prices of gasoline and diesel fuel;
- disruption of Walmart's supply chain, including disruption of the transport of goods from foreign suppliers to Walmart’s facilities;
- information security events and information security-related costs;
- trade restrictions, changes in tariff and freight rates;
- the size and turnover of Walmart’s hourly workforce in the U.S.;
- labor costs, including healthcare and other benefit costs;
- casualty and accident-related costs and insurance costs;
- the availability and cost of appropriate locations for new and relocated stores, clubs and other facilities;
- local real estate, zoning, land use and other laws, ordinances, legal restrictions and initiatives that impose limitations on Walmart's ability to build, relocate or expand stores in certain locations;
- delays in construction or opening of new, expanded or relocated units;
- the availability of persons with the necessary skills and abilities necessary to meet the company's needs for managing and staffing new units and conducting their operations and to meet seasonal associate hiring needs;
- the availability of necessary utilities for new units;
- the availability of skilled labor in areas in which new units are to be constructed or existing units are to be relocated, expanded or remodeled;
- changes in tax and other laws, including changes in individual or corporate tax rates and labor laws;
- developments in, outcomes of, and costs incurred in legal proceedings to which Walmart is a party;
- Walmart’s expenditures for FCPA- and compliance-related matters;
- currency exchange rate fluctuations and changes in market interest rates;
- the amount of Walmart's net sales denominated in particular currencies other than the U.S. dollar;
- Walmart's effective tax rate and factors affecting that rate; and
- changes in generally accepted accounting principles and unanticipated changes in accounting estimates or judgments.
|
|
|
||||||||||||||||||||||||||||||
|
Wal-Mart Stores, Inc.
Consolidated Statements of Income
(Unaudited) |
|||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
|
|
|
Quarters Ended |
|
|
|
|
|
|
|
Fiscal Years Ended |
|
|
|
|
||||||||||||||||
| SUBJECT TO RECLASSIFICATION |
|
|
January 31, |
|
|
|
|
|
|
January 31, |
|
|
|||||||||||||||||||
| (Dollars in millions, except share data) |
|
|
2015 |
|
|
2014 |
|
|
|
Percent Change |
|
|
|
2015 |
|
|
2014 |
|
|
|
Percent Change | ||||||||||
| Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
| Net sales |
|
|
\\$ | 130,650 |
|
|
|
\\$ | 128,786 |
|
|
|
|
1.4 | % |
|
|
|
\\$ | 482,229 |
|
|
|
\\$ | 473,076 |
|
|
|
|
1.9 | % |
| Membership and other income |
|
|
915 |
|
|
920 |
|
|
|
(0.5 | )% |
|
|
|
3,422 |
|
|
3,218 |
|
|
|
6.3 | % | ||||||||
| Total revenues |
|
|
|
131,565 |
|
|
|
|
129,706 |
|
|
|
|
1.4 | % |
|
|
|
|
485,651 |
|
|
|
|
476,294 |
|
|
|
|
2.0 | % |
| Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
| Cost of sales |
|
|
|
99,115 |
|
|
|
|
97,971 |
|
|
|
|
1.2 | % |
|
|
|
|
365,086 |
|
|
|
|
358,069 |
|
|
|
|
2.0 | % |
| Operating, selling, general and administrative expenses |
|
|
24,501 |
|
|
24,388 |
|
|
|
0.5 | % |
|
|
|
93,418 |
|
|
91,353 |
|
|
|
2.3 | % | ||||||||
| Operating income |
|
|
|
7,949 |
|
|
|
|
7,347 |
|
|
|
|
8.2 | % |
|
|
|
|
27,147 |
|
|
|
|
26,872 |
|
|
|
|
1.0 | % |
| Interest: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
| Debt |
|
|
|
560 |
|
|
|
|
516 |
|
|
|
|
8.5 | % |
|
|
|
|
2,161 |
|
|
|
|
2,072 |
|
|
|
|
4.3 | % |
| Capital leases |
|
|
|
63 |
|
|
|
|
65 |
|
|
|
|
(3.1 | )% |
|
|
|
|
300 |
|
|
|
|
263 |
|
|
|
|
14.1 | % |
| Interest income |
|
|
(37 | ) |
|
|
(27 | ) |
|
|
|
37.0 | % |
|
|
|
(113 | ) |
|
|
(119 | ) |
|
|
|
(5.0 | )% | ||||
| Interest, net |
|
|
586 |
|
|
554 |
|
|
|
5.8 | % |
|
|
|
2,348 |
|
|
2,216 |
|
|
|
6.0 | % | ||||||||
|
Income from continuing operations before income taxes
|
|
|
|
7,363 |
|
|
|
|
6,793 |
|
|
|
|
8.4 | % |
|
|
|
|
24,799 |
|
|
|
|
24,656 |
|
|
|
|
0.6 | % |
|
Provision for income taxes
|
|
|
2,175 |
|
|
2,249 |
|
|
|
(3.3 | )% |
|
|
|
7,985 |
|
|
8,105 |
|
|
|
(1.5 | )% | ||||||||
| Income from continuing operations |
|
|
|
5,188 |
|
|
|
|
4,544 |
|
|
|
|
14.2 | % |
|
|
|
|
16,814 |
|
|
|
|
16,551 |
|
|
|
|
1.6 | % |
| Income from discontinued operations, net of income taxes |
|
|
— |
|
|
106 |
|
|
|
-100.0 | % |
|
|
|
285 |
|
|
144 |
|
|
|
97.9 | % | ||||||||
| Consolidated net income |
|
|
|
5,188 |
|
|
|
|
4,650 |
|
|
|
|
11.6 | % |
|
|
|
|
17,099 |
|
|
|
|
16,695 |
|
|
|
|
2.4 | % |
| Less consolidated net income attributable to noncontrolling interest |
|
|
(222 | ) |
|
|
(219 | ) |
|
|
|
1.4 | % |
|
|
|
(736 | ) |
|
|
(673 | ) |
|
|
|
9.4 | % | ||||
| Consolidated net income attributable to Walmart |
|
|
\\$ | 4,966 |
|
|
\\$ | 4,431 |
|
|
|
12.1 | % |
|
|
|
\\$ | 16,363 |
|
|
\\$ | 16,022 |
|
|
|
2.1 | % | ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Income from continuing operations attributable to Walmart: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Income from continuing operations |
|
|
\\$ | 5,188 |
|
|
|
\\$ | 4,544 |
|
|
|
|
14.2 | % |
|
|
|
\\$ | 16,814 |
|
|
|
\\$ | 16,551 |
|
|
|
|
1.6 | % |
| Less income from continuing operations attributable to noncontrolling interest |
|
|
(222 | ) |
|
|
(190 | ) |
|
|
|
16.8 | % |
|
|
|
(632 | ) |
|
|
(633 | ) |
|
|
|
(0.2 | )% | ||||
| Income from continuing operations attributable to Walmart |
|
|
\\$ | 4,966 |
|
|
\\$ | 4,354 |
|
|
|
14.1 | % |
|
|
|
\\$ | 16,182 |
|
|
\\$ | 15,918 |
|
|
|
1.7 | % | ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Basic net income per common share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
| Basic income per common share from continuing operations attributable to Walmart |
|
|
\\$ | 1.54 |
|
|
|
\\$ | 1.35 |
|
|
|
|
14.1 | % |
|
|
|
\\$ | 5.01 |
|
|
|
\\$ | 4.87 |
|
|
|
|
2.9 | % |
| Basic income per common share from discontinued operations attributable to Walmart |
|
|
— |
|
|
0.02 |
|
|
|
-100.0 | % |
|
|
|
0.06 |
|
|
0.03 |
|
|
|
100.0 | % | ||||||||
| Basic net income per common share attributable to Walmart |
|
|
\\$ | 1.54 |
|
|
\\$ | 1.37 |
|
|
|
12.4 | % |
|
|
|
\\$ | 5.07 |
|
|
\\$ | 4.90 |
|
|
|
3.5 | % | ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Diluted net income per common share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
| Diluted income per common share from continuing operations attributable to Walmart |
|
|
\\$ | 1.53 |
|
|
|
\\$ | 1.34 |
|
|
|
|
14.2 | % |
|
|
|
\\$ | 4.99 |
|
|
|
\\$ | 4.85 |
|
|
|
|
2.9 | % |
| Diluted income per common share from discontinued operations attributable to Walmart |
|
|
— |
|
|
0.02 |
|
|
|
(100.0 | )% |
|
|
|
0.06 |
|
|
0.03 |
|
|
|
100.0 | % | ||||||||
| Diluted net income per common share attributable to Walmart |
|
|
\\$ | 1.53 |
|
|
\\$ | 1.36 |
|
|
|
12.5 | % |
|
|
|
\\$ | 5.05 |
|
|
\\$ | 4.88 |
|
|
|
3.5 | % | ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Weighted-average common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
| Basic |
|
|
|
3,230 |
|
|
|
|
3,240 |
|
|
|
|
|
|
|
|
|
3,230 |
|
|
|
|
3,269 |
|
|
|
|
|
||
| Diluted |
|
|
|
3,242 |
|
|
|
|
3,254 |
|
|
|
|
|
|
|
|
|
3,243 |
|
|
|
|
3,283 |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
| Dividends declared per common share |
|
|
|
|
|
|
|
|
|
|
|
|
|
\\$ | 1.92 |
|
|
|
\\$ | 1.88 |
|
|
|
|
|
||||||
|
Wal-Mart Stores, Inc.
Consolidated Balance Sheets
(Unaudited) |
|||||||||
|
|
|
|
|
||||||
|
|
|
|
|
|
|||||
| SUBJECT TO RECLASSIFICATION |
|
|
|
|
|
||||
| (Dollars in millions) |
|
|
January 31, |
|
January 31, | ||||
| ASSETS |
|
|
2015 |
|
2014 | ||||
| Current assets: |
|
|
|
|
|
||||
| Cash and cash equivalents |
|
|
\\$ | 9,135 |
|
|
\\$ | 7,281 |
|
| Receivables, net |
|
|
|
6,778 |
|
|
|
6,677 |
|
| Inventories |
|
|
|
45,141 |
|
|
|
44,858 |
|
| Prepaid expenses and other |
|
|
|
2,224 |
|
|
|
1,909 |
|
| Current assets of discontinued operations |
|
|
— |
|
460 | ||||
| Total current assets |
|
|
|
63,278 |
|
|
|
61,185 |
|
| Property and equipment: |
|
|
|
|
|
||||
| Property and equipment |
|
|
|
177,395 |
|
|
|
173,089 |
|
| Less accumulated depreciation |
|
|
(63,115 | ) |
|
(57,725 | ) | ||
| Property and equipment, net |
|
|
|
114,280 |
|
|
|
115,364 |
|
| Property under capital leases: |
|
|
|
|
|
||||
| Property under capital leases |
|
|
|
5,239 |
|
|
|
5,589 |
|
| Less accumulated amortization |
|
|
(2,864 | ) |
|
(3,046 | ) | ||
| Property under capital leases, net |
|
|
|
2,375 |
|
|
|
2,543 |
|
|
|
|
|
|
|
|||||
| Goodwill |
|
|
|
18,102 |
|
|
|
19,510 |
|
| Other assets and deferred charges |
|
|
5,671 |
|
6,149 | ||||
| Total assets |
|
|
\\$ | 203,706 |
|
\\$ | 204,751 | ||
|
|
|
|
|
|
|||||
| LIABILITIES AND EQUITY |
|
|
|
|
|
||||
| Current liabilities: |
|
|
|
|
|
||||
| Short-term borrowings |
|
|
\\$ | 1,592 |
|
|
\\$ | 7,670 |
|
| Accounts payable |
|
|
|
38,410 |
|
|
|
37,415 |
|
| Accrued liabilities |
|
|
|
19,152 |
|
|
|
18,793 |
|
| Accrued income taxes |
|
|
|
1,021 |
|
|
|
966 |
|
| Long-term debt due within one year |
|
|
|
4,810 |
|
|
|
4,103 |
|
| Obligations under capital leases due within one year |
|
287 |
|
|
|
309 |
|
||
| Current liabilities of discontinued operations |
|
|
— |
|
89 | ||||
| Total current liabilities |
|
|
|
65,272 |
|
|
|
69,345 |
|
|
|
|
|
|
|
|||||
| Long-term debt |
|
|
|
41,086 |
|
|
|
41,771 |
|
| Long-term obligations under capital leases |
|
|
|
2,606 |
|
|
|
2,788 |
|
| Deferred income taxes and other |
|
|
|
8,805 |
|
|
|
8,017 |
|
| Redeemable noncontrolling interest |
|
|
|
— |
|
|
|
1,491 |
|
|
|
|
|
|
|
|||||
| Commitments and contingencies |
|
|
|
|
|
||||
|
|
|
|
|
|
|||||
| Equity: |
|
|
|
|
|
||||
| Common stock |
|
|
|
323 |
|
|
|
323 |
|
| Capital in excess of par value |
|
|
|
2,462 |
|
|
|
2,362 |
|
| Retained earnings |
|
|
|
85,777 |
|
|
|
76,566 |
|
| Accumulated other comprehensive income (loss) |
|
|
(7,168 | ) |
|
(2,996 | ) | ||
| Total Walmart shareholders’ equity |
|
|
|
81,394 |
|
|
|
76,255 |
|
| Nonredeemable noncontrolling interest |
|
|
4,543 |
|
5,084 | ||||
| Total equity |
|
|
85,937 |
|
81,339 | ||||
| Total liabilities and equity |
|
|
\\$ | 203,706 |
|
\\$ | 204,751 | ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Wal-Mart Stores, Inc.
Consolidated Statements of Cash Flows
(Unaudited) |
||||||||
|
|
|
|
|
|||||
|
|
|
|
|
|||||
|
|
|
Fiscal Years Ended | ||||||
| SUBJECT TO RECLASSIFICATION |
|
January 31, | ||||||
| (Dollars in millions) |
|
2015 |
|
2014 | ||||
| Cash flows from operating activities: |
|
|
|
|
||||
| Consolidated net income |
|
\\$ | 17,099 |
|
|
\\$ | 16,695 |
|
| (Income) loss from discontinued operations, net of income taxes |
|
(285 | ) |
|
(144 | ) | ||
| Income from continuing operations |
|
|
16,814 |
|
|
|
16,551 |
|
| Adjustments to reconcile consolidated net income to net cash provided by operating activities: |
|
|
|
|||||
| Depreciation and amortization |
|
|
9,173 |
|
|
|
8,870 |
|
| Deferred income taxes |
|
|
(503 | ) |
|
|
(279 | ) |
| Other operating activities |
|
|
785 |
|
|
|
938 |
|
| Changes in certain assets and liabilities: |
|
|
|
|
||||
| Receivables, net |
|
|
(569 | ) |
|
|
(566 | ) |
| Inventories |
|
|
(1,229 | ) |
|
|
(1,667 | ) |
| Accounts payable |
|
|
2,678 |
|
|
|
531 |
|
| Accrued liabilities |
|
|
1,249 |
|
|
|
103 |
|
| Accrued income taxes |
|
166 |
|
(1,224 | ) | |||
| Net cash provided by operating activities |
|
|
28,564 |
|
|
|
23,257 |
|
|
|
|
|
|
|||||
| Cash flows from investing activities: |
|
|
|
|
||||
| Payments for property and equipment |
|
|
(12,174 | ) |
|
|
(13,115 | ) |
| Proceeds from the disposal of property and equipment |
|
|
570 |
|
|
|
727 |
|
| Proceeds from disposal of certain operations |
|
|
671 |
|
|
|
— |
|
| Other investing activities |
|
(192 | ) |
|
(138 | ) | ||
| Net cash used in investing activities |
|
|
(11,125 | ) |
|
|
(12,526 | ) |
|
|
|
|
|
|||||
| Cash flows from financing activities: |
|
|
|
|
||||
| Net change in short-term borrowings |
|
|
(6,288 | ) |
|
|
911 |
|
| Proceeds from issuance of long-term debt |
|
|
5,174 |
|
|
|
7,072 |
|
| Payments of long-term debt |
|
|
(3,904 | ) |
|
|
(4,968 | ) |
| Dividends paid |
|
|
(6,185 | ) |
|
|
(6,139 | ) |
| Purchase of Company stock |
|
|
(1,015 | ) |
|
|
(6,683 | ) |
| Dividends paid to noncontrolling interest |
|
|
(600 | ) |
|
|
(426 | ) |
| Purchase of noncontrolling interest |
|
|
(1,844 | ) |
|
|
(296 | ) |
| Other financing activities |
|
(409 | ) |
|
(260 | ) | ||
| Net cash used in financing activities |
|
|
(15,071 | ) |
|
|
(10,789 | ) |
|
|
|
|
|
|||||
| Effect of exchange rates on cash and cash equivalents |
|
(514 | ) |
|
(442 | ) | ||
|
|
|
|
|
|||||
| Net increase (decrease) in cash and cash equivalents |
|
|
1,854 |
|
|
|
(500 | ) |
| Cash and cash equivalents at beginning of year |
|
7,281 |
|
7,781 | ||||
| Cash and cash equivalents at end of year |
|
\\$ | 9,135 |
|
\\$ | 7,281 | ||
|
|
|
|
|
|
|
|
|
|
Reconciliations of and Other Information Regarding Non-GAAP Financial Measures
(Unaudited)
(In millions, except per share data)
The following information provides reconciliations of certain non-GAAP financial measures presented in the press release to which this reconciliation is attached to the most directly comparable financial measures calculated and presented in accordance with generally accepted accounting principles (GAAP). The company has provided the non-GAAP financial information presented in the press release, which is not calculated or presented in accordance with GAAP, as information supplemental and in addition to the financial measures presented in the press release that are calculated and presented in accordance with GAAP. Such non-GAAP financial measures should not be considered superior to, as a substitute for or alternative to, and should be considered in conjunction with the GAAP financial measures presented in the press release. The non-GAAP financial measures in the press release may differ from similar measures used by other companies.
Calculation of Return on Investment and Return on Assets
Management believes return on investment (ROI) is a meaningful metric to share with investors because it helps investors assess how effectively Walmart is deploying its assets. Trends in ROI can fluctuate over time as management balances long-term potential strategic initiatives with possible short-term impacts.
ROI was 16.9 percent for the fiscal year ended Jan. 31, 2015, which was relatively flat compared to ROI for the fiscal year ended
We define ROI as adjusted operating income (operating income plus interest income, depreciation and amortization, and rent expense) for the trailing 12 months divided by average invested capital during that period. We consider average invested capital to be the average of our beginning and ending total assets, plus average accumulated depreciation and average amortization, less average accounts payable and average accrued liabilities for that period, plus a rent factor equal to the rent for the fiscal year or trailing 12 months multiplied by a factor of 8. When we have discontinued operations, we exclude the impact of the discontinued operations.
Our calculation of ROI is considered a non-GAAP financial measure because we calculate ROI using financial measures that exclude and include amounts that are included and excluded in the most directly comparable GAAP financial measure. For example, we exclude the impact of depreciation and amortization from our reported operating income in calculating the numerator of our calculation of ROI. In addition, we include a factor of 8 for rent expense that estimates the hypothetical capitalization of our operating leases. We consider return on assets (ROA) to be the financial measure computed in accordance with generally accepted accounting principles (GAAP) that is the most directly comparable financial measure to our calculation of ROI. ROI differs from ROA (which is consolidated income from continuing operations for the period divided by average total assets of continuing operations for the period) because ROI: adjusts operating income to exclude certain expense items and adds interest income; adjusts total assets of continuing operations for the impact of accumulated depreciation and amortization, accounts payable and accrued liabilities; and incorporates a factor of rent to arrive at total invested capital.
Although ROI is a standard financial metric, 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. We urge you to understand the methods used by other companies to calculate their ROI before comparing our ROI to that of such other companies.
The calculation of ROI, along with a reconciliation to the calculation of ROA, the most comparable GAAP financial measure, is as follows:
|
|
|
|
|
||||||||||
| Wal-Mart Stores, Inc. | |||||||||||||
| Return on Investment and Return on Assets | |||||||||||||
|
|
|
|
|
|
Fiscal Years Ended | ||||||||
|
|
|
|
|
|
January 31, | ||||||||
| (Dollars in millions) |
|
|
|
|
2015 |
|
|
2014 | |||||
| CALCULATION OF RETURN ON INVESTMENT |
|
|
|
|
|
|
|
|
|||||
| Numerator |
|
|
|
|
|
|
|
|
|||||
| Operating income |
|
|
|
|
\\$ | 27,147 |
|
|
|
\\$ | 26,872 |
|
|
| + Interest income |
|
|
|
|
|
113 |
|
|
|
|
119 |
|
|
| + Depreciation and amortization |
|
|
|
|
|
9,173 |
|
|
|
|
8,870 |
|
|
| + Rent |
|
|
|
|
2,777 |
|
|
2,828 | |||||
| Adjusted operating income |
|
|
|
|
\\$ | 39,210 |
|
|
\\$ | 38,689 | |||
|
|
|
|
|
|
|
|
|
||||||
| Denominator |
|
|
|
|
|
|
|
|
|||||
| Average total assets of continuing operations1 |
|
|
|
|
\\$ | 203,999 |
|
|
|
\\$ | 203,680 |
|
|
| + Average accumulated depreciation and amortization1 |
|
|
|
63,375 |
|
|
|
|
57,907 |
|
|||
| - Average accounts payable1 |
|
|
|
|
|
37,913 |
|
|
|
|
37,748 |
|
|
| - Average accrued liabilities1 |
|
|
|
|
|
18,973 |
|
|
|
|
18,802 |
|
|
| + Rent x 8 |
|
|
|
|
22,216 |
|
|
22,624 | |||||
| Average invested capital |
|
|
|
|
\\$ | 232,704 |
|
|
\\$ | 227,661 | |||
| Return on investment (ROI) |
|
|
|
|
16.9 | % |
|
|
17.0 | % | |||
|
|
|
|
|
|
|
|
|
||||||
| CALCULATION OF RETURN ON ASSETS |
|
|
|
|
|
|
|
|
|||||
| Numerator |
|
|
|
|
|
|
|
|
|||||
| Income from continuing operations |
|
|
|
|
\\$ | 16,814 |
|
|
\\$ | 16,551 | |||
| Denominator |
|
|
|
|
|
|
|
|
|||||
| Average total assets of continuing operations1 |
|
|
|
|
\\$ | 203,999 |
|
|
\\$ | 203,680 | |||
| Return on assets (ROA) |
|
|
|
|
8.2 | % |
|
|
8.1 | % | |||
|
|
|
|
|
|
|
|
|
||||||
|
|
|
As of January 31, | |||||||||||
| Certain Balance Sheet Data |
|
2015 |
|
|
2014 |
|
|
2013 | |||||
| Total assets of continuing operations |
|
\\$ | 203,706 |
|
|
\\$ | 204,291 |
|
|
|
\\$ | 203,068 |
|
| Accumulated depreciation and amortization |
|
|
65,979 |
|
|
|
60,771 |
|
|
|
|
55,043 |
|
| Accounts payable |
|
|
38,410 |
|
|
|
37,415 |
|
|
|
|
38,080 |
|
| Accrued liabilities |
|
|
19,152 |
|
|
|
18,793 |
|
|
|
|
18,808 |
|
|
|
|
|
|
|
|
|
|
||||||
| 1 The average is based on the addition of the account balance at the end of the current period to the account balance at the end of the prior period and dividing by 2. | |||||||||||||
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. Free cash flow was
Free cash flow is considered a non-GAAP financial measure. Management believes, however, that free cash flow, which measures our ability to generate additional cash from our business operations, is an important financial measure for use in evaluating the company's financial performance. Free cash flow should be considered in addition to, rather than as a substitute for, consolidated income from continuing operations as a measure of our performance and net cash provided by operating activities as a measure of our liquidity.
Additionally, 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.
Although other companies report their free cash flow, numerous methods may exist for calculating a company's free cash flow. As a result, the method used by Walmart's management to calculate our free cash flow may differ from the methods used by other companies to calculate their free cash flow. We urge you to understand the methods used by other companies to calculate their free cash flow before comparing our free cash flow to that of such other companies.
The following table sets forth a reconciliation of free cash flow, a non-GAAP financial measure, to net cash provided by operating activities, which we believe to be the GAAP financial measure most directly comparable to free cash flow, as well as information regarding net cash used in investing activities and net cash used in financing activities.
|
|
|
|||||||
|
|
|
Fiscal Years Ended | ||||||
|
|
|
January 31, | ||||||
| (Dollars in millions) |
|
2015 | 2014 | |||||
| Net cash provided by operating activities |
|
\\$ | 28,564 |
|
|
\\$ | 23,257 |
|
| Payments for property and equipment |
|
(12,174 | ) |
|
(13,115 | ) | ||
| Free cash flow |
|
\\$ | 16,390 |
|
\\$ | 10,142 | ||
|
|
|
|
|
|
|
|||
| Net cash used in investing activities1 |
|
\\$ | (11,125 | ) |
|
\\$ | (12,526 | ) |
| Net cash used in financing activities |
|
\\$ | (15,071 | ) |
|
\\$ | (10,789 | ) |
|
|
|
|
|
|
|
|
|
|
Constant Currency
In discussing our operating results, the term currency exchange rates refers to the currency exchange rates we use to convert the operating results for all countries where the functional currency is not the U.S. dollar. 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. Throughout our discussion, we refer to the results of this calculation as the impact of currency exchange rate fluctuations. When we refer to constant currency operating results, this means operating results without the impact of the currency exchange rate fluctuations and without the impact of acquisitions, if any, until the acquisitions are included in both comparable periods. The disclosure of constant currency amounts or results permits investors to understand better Walmart's underlying performance without the effects of currency exchange rate fluctuations or acquisitions.
The table below reflects the calculation of constant currency for total revenues, net sales and operating income for the three months and fiscal year ended
|
|
|
|
||||||||||||||||||||||||||||
|
|
|
Three Months Ended January 31, 2015 |
|
|
Fiscal Year Ended January 31, 2015 | |||||||||||||||||||||||||
|
|
|
Walmart International | Consolidated |
|
|
Walmart International | Consolidated | |||||||||||||||||||||||
| (Dollars in millions) |
|
2015 | Percent Change |
|
|
2015 | Percent Change |
|
|
2015 | Percent Change |
|
|
2015 | Percent Change | |||||||||||||||
| Total revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
| As reported |
|
\\$ | 36,537 |
|
|
(3.8 | )% |
|
|
\\$ | 131,565 |
|
1.4 | % |
|
|
\\$ | 137,424 |
|
|
(0.1 | )% |
|
|
\\$ | 485,651 |
|
|
2.0 | % |
| Currency exchange rate fluctuations1 |
|
2,626 |
|
|
|
2,626 |
|
|
5,323 |
|
|
|
5,323 |
|
||||||||||||||||
|
|
|
39,163 |
|
|
|
|
|
|
134,191 |
|
|
|
|
|
142,747 |
|
|
|
|
|
|
490,974 |
|
|
|
|
||||
| Total revenues from acquisitions |
|
— |
|
|
|
— |
|
|
— |
|
|
|
— |
|
||||||||||||||||
| Constant currency total revenues |
|
\\$ | 39,163 |
|
3.1 | % |
|
\\$ | 134,191 | 3.5 | % |
|
\\$ | 142,747 |
|
3.7 | % |
|
\\$ | 490,974 |
|
3.1 | % | |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
| Net sales: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
| As reported |
|
\\$ | 36,205 |
|
|
(3.9 | )% |
|
|
\\$ | 130,650 |
|
1.4 | % |
|
|
\\$ | 136,160 |
|
|
(0.3 | )% |
|
|
\\$ | 482,229 |
|
|
1.9 | % |
| Currency exchange rate fluctuations1 |
|
2,599 |
|
|
|
2,599 |
|
|
5,267 |
|
|
|
5,267 |
|
||||||||||||||||
|
|
|
38,804 |
|
|
|
|
|
|
133,249 |
|
|
|
|
|
141,427 |
|
|
|
|
|
|
487,496 |
|
|
|
|
||||
| Net sales from acquisitions |
|
— |
|
|
|
— |
|
|
— |
|
|
|
— |
|
||||||||||||||||
| Constant currency net sales |
|
\\$ | 38,804 |
|
3.0 | % |
|
\\$ | 133,249 | 3.5 | % |
|
\\$ | 141,427 |
|
3.6 | % |
|
\\$ | 487,496 |
|
3.0 | % | |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
| Operating income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
| As reported |
|
\\$ | 2,050 |
|
|
66.4 | % |
|
|
\\$ | 7,949 |
|
8.2 | % |
|
|
\\$ | 6,171 |
|
|
19.8 | % |
|
|
\\$ | 27,147 |
|
|
1.0 | % |
| Currency exchange rate fluctuations1 |
|
163 |
|
|
|
163 |
|
|
225 |
|
|
|
225 |
|
||||||||||||||||
|
|
|
2,213 |
|
|
|
|
|
|
8,112 |
|
|
|
|
|
6,396 |
|
|
|
|
|
|
27,372 |
|
|
|
|
||||
| Operating income (loss) from acquisitions |
|
— |
|
|
|
— |
|
|
— |
|
|
|
— |
|
||||||||||||||||
| Constant currency operating income |
|
\\$ | 2,213 |
|
79.6 | % |
|
\\$ | 8,112 | 10.4 | % |
|
\\$ | 6,396 |
|
24.1 | % |
|
\\$ | 27,372 |
|
1.9 | % | |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 Excludes currency exchange rate fluctuations related to
acquisitions until the acquisitions are included in both
comparable periods.
|
||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The underlying diluted earnings per share from continuing operations attributable to Walmart (Underlying EPS) for each of the three-month periods and fiscal years ended
We have calculated the Underlying EPS for the three months and the fiscal year ended
Underlying EPS for each of the three months and the fiscal year ended
| Underlying EPS - Fiscal 2015 | |||||||||||||
|
|
Three Months Ended January 31, 2015 |
Fiscal Year Ended January 31, 2015 |
|||||||||||
|
|
Diluted net income per common share: |
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
||||||
|
|
|
Underlying EPS |
|
\\$ | 1.61 |
|
|
|
|
\\$ | 5.07 |
|
|
|
|
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Adjustments to Underlying EPS |
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Wage and Hour Litigation Matter |
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(0.05 | ) |
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(0.05 | ) |
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Japan Store Closures |
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(0.03 | ) |
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(0.03 | ) |
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EPS |
|
\\$ | 1.53 |
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\\$ | 4.99 |
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Underlying EPS for the three months and the fiscal year ended
| Underlying EPS - Fiscal 2014 | ||||||||||||
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Three Months Ended January 31, 2014 |
Fiscal Year Ended January 31, 2014 |
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| Diluted net income per common share: |
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| Underlying EPS |
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\\$ | 1.60 |
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\\$ | 5.11 |
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| Adjustments to Underlying EPS |
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| Brazil Taxes |
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(0.06 | ) |
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(0.06 | ) |
| Brazil Employment Matters |
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(0.05 | ) |
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(0.05 | ) |
| Store Closures |
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(0.06 | ) |
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(0.06 | ) |
| Lease Matters |
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(0.03 | ) |
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(0.03 | ) |
| India Transaction |
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(0.05 | ) |
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(0.05 | ) |
| Sam's Restructuring |
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(0.01 | ) |
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(0.01 | ) |
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| EPS |
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\\$ | 1.34 |
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\\$ | 4.85 |
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The following financial measures presented in the press release to which this reconciliation is attached are non-GAAP financial measures as defined by the
-
the comparable club sales of the company's
Sam's Club operating segment (Sam's Club ) for the 13-week and 52-week period endedJan. 30, 2015 and the 14-week and 53 week period endedJan. 31, 2014 , the projected comparable club sales ofSam's Club for the 13 weeks endingMay 1, 2015 and the comparable club sales ofSam's Club for the 13 weeks ended May 2, 2014, in each case calculated by excludingSam's Club's fuel sales for such periods (the "Sam's Club Comparable Sales Measures"); -
the net sales of
Sam's Club for the fiscal year endedJan. 31, 2015 and the percentage increase in the net sales ofSam's Club for the fiscal year endedJan. 31, 2015 over the net sales ofSam's Club for the fiscal year endedJan. 31, 2014 in each case calculated by excludingSam's Club's fuel sales for the relevant period; and -
the segment operating income of
Sam's Club for the three month periods and fiscal yearsJan. 31, 2015 and 2014, the percentage increase in the segment operating income ofSam's Club for the three months or fiscal yearJan. 31, 2015 over the segment operating income ofSam's Club for the three months or fiscal yearJan. 31, 2014 , in each case calculated by excludingSam's Club's fuel sales for the relevant period (collectively with the financial measures described in the immediately preceding bullet point, the "Sam's Club Measures").
We believe that the presentation of the Sam's Club Comparable Sales Measures and the Sam's Club Measures provides useful information to investors regarding the company's financial condition and results of operations because that information permits investors to understand the effect of the fuel sales of
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